Preamble

The House met at half-past Two o'clock

PRAYERS

[MR. SPEAKER in the Chair]

Oral Answers to Questions — FOREIGN AND COMMONWEALTH AFFAIRS

Eastern Europe

Mr. Anthony Coombs: To ask the Secretary of State for Foreign and Commonwealth Affairs what further steps are being planned by the Government to assist east European countries.

The Minister of State, Foreign and Commonwealth Office (Mr. William Waldegrave): We have announced the Government's plan to extend our existing know-how fund for Poland and Hungary to the other countries of eastern Europe. This will make available substantial sums of money to finance projects aimed to help the transition to democracy and a market economy. We are also helping through the EC and other multilateral organizations.

Mr. Coombs: Given the current instability in eastern Europe, does my right hon. Friend agree that our strategic policy should be one of caution, and that in terms of individual development towards democracy and a free enterprise system, there is a great deal to be done? In that context does he recognise the power of American and German institutions, such as the National Foundation for Democracy, the Konrad Adenauer Stiftung and others, to influence policy in eastern Europe? What will the Government do to bring on such institutions in Britain?

Mr. Waldegrave: I agree with my hon. Friend's overall assessment. Right hon. and hon. Members on both sides of the House have suggested that we might consider proposals of the type that he put forward. This is new and quite difficult territory, because the fund will be channelling support to political organisations, which is quite different from normal aid. The hon. Member for Inverness, Nairn and Lochaber (Sir R. Johnston) has made suggestions on this issue, which we are considering.

Mr. Alton: Has the Minister had a chance to study reports from Bucharest that suggest that up to 28 per cent. of children in the hospitals there are infected by HIV, and are AIDS victims? Has the Minister had the chance to consider the request that packs for detection of the disease, sterile needles and scientific and medical help be provided by the Government? Will he tell the House how he intends to respond to that?

Mr. Waldegrave: The whole House will have been moved by the terrible stories that have emerged in the past few days. I am delighted to say that, as a first response, the

Government have decided today to send 1 million disposable syringes, and we shall respond to further requests

Sir Peter Blaker: Is my right hon. Friend aware of the unanimous welcome that has been given by the countries concerned to the British know-how funds, and how welcome it is that those funds will be extended to other countries in eastern Europe? Is he further aware that, with the aid of the funds, BBC external services are planning this year to train 40 Polish broadcasters how to operate a free broadcasting system? Will he join me in paying tribute to the BBC external services for the fact that over these momentous months they have been broadcasting the truth to the countries of eastern Europe?

Mr. Waldegrave: I am delighted to join in that tribute and to confirm the accuracy of what my right hon. Friend said about the new role that the BBC is taking in training proper journalists in the East. Later on today I am going to a party given by the Romanian services of the BBC, and I pay particular tribute to them, but all the external services have played a crucial role in telling the truth and facilitating the changes that we have seen

Mr. Anderson: The Minister will know that we join wholeheartedly in the broad thrust of Government policy on the know-how funds, which allow us to play to our strengths, be it in management or in our experience of parliamentary democracy. On the more general theme of relations with eastern and central Europe, does he agree that, at this time of fundamental change, it is important and in our national interest not to be left isolated and irelevant in the eyes of our American and European allies? Will he therefore persist in his efforts to synchronise the Prime Minister with history?

Mr. Waldegrave: My right hon. Friend the Foreign Secretary made an important speech in Germany yesterday, which I think was widely welcomed. Of all the countries in Europe that are central to the processes now taking place, only Britain and France are members of all the crucial organisations�žthe four powers, the European Community, the North Atlantic Treaty Organisation, and so forth. Our position is and will remain central.

Helsinki Final Act

Mr. Amess: To ask the Secretary of State for Foreign and Commonwealth Affairs what assessment he has made of the implications of the proposed Soviet Emigration Bill for fulfilment of the obligations imposed by the Helsinki Final Act.

Mr. Waldegrave: The draft Soviet emigration law is an improvement on present law and practice, but still places unjustified restrictions on travel abroad by Soviet citizens. We shall continue to press the Soviet authorities to bring their law into conformity with their international obligations, and to resolve the refusenik problem once and for all.

Mr. Amess: Does my right hon. Friend share my concern that the Soviet emigration law still places restrictions on the free movement of Jewish people on the grounds that they might have held sensitive state jobs or


come from what could loosely be described as broken homes? Will he please undertake to raise those concerns with his opposite number in the Soviet Union?

Mr. Waldegrave: My hon. Friend puts his finger on two of the exact points that are unsatisfactory in the present draft. I raised those very points with vice-Minister Adamishin when I was in Moscow recently and we shall continue to urge for much greater clarity and a proper law to get rid of those problems once and for all.

Sir Russell Johnston: Will the Minister simultaneously make representations to the United States about the obstacles that it is now placing in the way of refugees from the Soviet Union settling there?

Mr. Waldegrave: The United States, like all other countries, undertakes its proper obligations to refugees. The right of countries to refuse access is not the same basic human right as the right to leave one's own country. That has been long established.

Mr. Budgen: Did the Russian Minister express any disagreement or annoyance about my right hon. Friend's impertinence in telling the Russians how to run their emigration laws?

Mr. Waldegrave: No, he did not, because, like all other Russian Ministers, particularly in the present climate, he rejoices in the fact that Mr. Brezhnev, surprisingly, signed the final Helsinki document. That gave us the perfect legal right to inquire into such matters.

South Africa

Mr. Nellist: To ask the Secretary of State for Foreign and Commonwealth Affairs what recent representations Her Majesty's Government have made to the Government of South Africa; and if he will make a statement.

The Secretary of State for Foreign and Commonwealth Affairs (Mr. Douglas Hurd): We make frequent representations to the South African Government on a wide range of issues.

Mr. Nellist: Is the Secretary of State aware that following President de Klerk's weekend announcement about the unbanning of the African National Congress and the release, after 27 years in prison, of Mr. Nelson Mandela, heads of western Governments sought to claim responsibility and ignored the white Government's retreat in the face of mounting defiance of the black workers and youth of South Africa? That is a bit like a chicken and a pig discussing an egg and bacon breakfast: for the chicken, it is a small contribution, but for the pig it is a total commitment. Are not the only negotiations that the black majority would seek, and consider worth while to enter into, ones that were about the transfer of power, a genuinely freely elected constituent assembly, the ending of segregation, laws of emergency and the Labour Act and the reinstatement of the right of black workers to bear arms for their own defence?

Mr. Hurd: I should have thought that even the hon. Gentleman could bring himself to welcome warmly the decision announced by President de Klerk. Those changes, and the way that they were announced and are to be brought about, vindicate our policy of contact rather than

isolation. The South African Government have taken major steps, opening the way to negotiations, and I hope that even the hon. Gentleman will expect the ANC and others to respond positively to them. We certainly do.

Mr. Gardiner: As President de Klerk has taken such significant steps to set the stage for constructive negotiations and discussions with all sections of the community, culminating in the expected release of Nelson Mandella, will my right hon. Friend do all that he can to impress upon the leaders of the ANC that they must put the concept of the armed struggle behind them and join the representatives of other blacks in constructive negotiations?

Mr. Hurd: Indeed, I agree with my hon. Friend. When Mr. Mandela is released, we hope that the ANC and others will agree to join in negotiations in conditions of peace and that the remaining emergency restrictions will be lifted.

Mr. Winnick: The changes announced last week by the South African President are certainly welcome. It is a step in the right direction, but does not the Foreign Secretary agree that much more must be done? Will the British Government make it quite clear to the South African authorities that if the people of eastern Europe have a right to freedom and democracy, the people of South Africa �žblack, white and coloured�žhave no less a right? Does not the Foreign Secretary recognise that the policy of sanctions and disinvestment followed by the United States played an important role in forcing the South African authorities to recognise the realities of life?

Mr. Hurd: I agree with the hon. Gentleman to this extent: there is a long road still to travel. However, I am sure that he will agree that President de Klerk has shown courage and wisdom in moving further at this time than anyone had expected. If the British Government had yielded to pressure from hon. Members such as the hon. Member for Walsall, North (Mr. Winnick) and many others outside the House, and had supported the imposition of comprehensive sanctions against South Africa, the result would have been an impoverished black majority in South Africa and the virtual impossibility of the South African Government being able to take the measures that they have announced.

Mr. John Carlisle: As the Prime Minister has sensibly and bravely lifted the cultural and scientific boycotts against South Africa after President de Klerk's excellent initiatives, will my right hon. Friend consider pursuing the same policy for sporting contacts, in particular for sports which, under the Gleneagles agreement, have proved that selection is not based on race, colour or ethnic origin? May we have some carrots please, instead of all the sticks of the past?

Mr. Hurd: As my right hon. Friend the Prime Minister has made clear, we believe that that is rather further down the road. We remain committed to the Gleneagles agreement.

Mr. Kaufman: The Foreign Secretary has just referred to the dangers of an impoverished black population in South Africa. When he visits South Africa next month, will he ask to be taken to Alexandra or Soweto by the sea, or to any of the other black townships where he will see the unbelievable grinding poverty that has been imposed on the black people of South Africa by the white supremacists


in South Africa? As to what the hon. Member for Luton, North (Mr. Carlisle) has just said, will the right hon. Gentleman explain why it is that when he and the Prime Minister say that we must not lower our guard against the Communist regimes that are toppling day by day in eastern Europe, they nevertheless want to get rid of such puny sanctions as we impose on South Africa at a time when the whole structure of apartheid remains intact? [HON. MEMBERS: "No."] Yes, apartheid remains totally intact; it has not been touched in any way. Can it be that this Government's hostility to Communism, which is becoming defunct, is greater than their hostility to apartheid, which still flourishes?

Mr. Hurd: Of course, there is black poverty in South Africa, though less than in many other African states. However, that poverty would have been made much worse and the ability of blacks slowly to rise to positions of responsibility in their society would have been made impossible had we yielded to the right hon. Gentleman's policy on sanctions. He cannot say that every aspect of apartheid remains intact. He is justified in saying that there is a long way to go, and I have already said that. If, however, he talked to holidaymakers in Durban and said that apartheid remains intact, he would get a very negative response. I hope that the right hon. Gentleman will take the opportunity to make it clear whether the Opposition are wholly committed to comprehensive sanctions or whether they, too, acknowledge that the sort of steps that President de Klerk has taken deserve encouragement and a response from them.

Mr. Nelson: On a point of order, Mr. Speaker. It is about the exchanges on that question.

Mr. Speaker: No, unless it is a definite matter of order that requires my immediate attention.

Mr. Nelson: I submit that it is. The prospect of reaching another question on South Africa�ž

Mr. Speaker: No. There is another question relating to South Africa on the Order Paper. The hon. Gentleman may be fortunate then.

Papua New Guinea

Mr. Key: To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement about the United Kingdom's relations with Papua New Guinea.

The Minister of State, Foreign and Commonwealth Office (Mr. Francis Maude): Our relations with Papua New Guinea are good.

Mr. Key: I am delighted to hear that. Does my hon. Friend agree that the fighting that led to the closure of the Bougainville copper mine is both a human and an economic tragedy, since 20 per cent. of the foreign exchange earnings of that country are now lost? Will Her Majesty's Government support the Government of Papua New Guinea in their application for assistance from the International Monetary Fund?

Mr. Maude: I am aware of the economic difficulties that the closure to which my hon. Friend referred has caused Papua New Guinea. We have a good record of supporting

the IMF's activities, when appropriate. In this case we shall look at any applications that are made to determine whether it was a proper decision.

Mr. Dalyell: Are the Government aware that the Port Moresby Government have done their very best to introduce sustainable rain forest legislation? Do the British Government support the enlightened and sensitive speech by the Prince of Wales on rain forest matters that some of us heard at Kew last night? Will they apply the Prince's idea for an international convention on the rain forest to countries such as Papua New Guinea, where it really would be of benefit?

Mr. Maude: I have not read the Prince of Wales' speech in detail, but I am aware of its general thrust. I know of the support that he expressed for the sort of measures that we are taking and supporting in respect of Latin America. I am aware that there is anxiety about the rain forest in Papua New Guinea. I do not have a detailed analysis of the environmental impact of the logging that is going on there, but the inroads being made into the rain forest are a matter of concern to us all, and we shall look into that carefully.

South Africa

Mr. Robert Hughes: To ask the Secretary of State for Foreign and Commonwealth Affairs what plans Her Majesty's Government have to ensure that South Africa implements the measures agreed by the United Nations in the declaration on South Africa at the United Nations 16th special session of the general assembly.

Mr. Hurd: The measures that President de Klerk announced on 2 February come very close to implementing the steps called for by the Commonwealth eminent persons group, with which the declaration is consistent. More is needed, but a warm welcome for the steps already taken is surely deserved.

Mr. Hughes: Will the Foreign Secretary join me today in paying tribute to the many South Africans of all races whose decades of struggle and suffering have brought President de Klerk to the position that he is in today? Will he listen to their voices, which are saying almost unanimously that the potential, the promise and the hope that President de Klerk's statement brings may well remain unfulfilled if the external arm of the struggle is abandoned or lessened? Will he say clearly that sanctions and external pressure can be dismantled only when apartheid itself is dismantled?

Mr. Hurd: I certainly join in paying tribute to all whose work has made possible the present progress; they come from all parts of South African society.
The House has argued about sanctions time and again. I believe that the statement of 2 February and the prospects now opening up for South Africa are justification for the policy of combined encouragement and persuasive pressure for which the Government have always stood. I believe that if we had followed the hon. Gentleman's sincerely given advice, South Africa would not have advanced to its present prospects.

Mr. Rathbone: Does my right hon. Friend accept that the developments in South Africa seem to have been hastened by the British Government's stand on continued commitment to fundamental change in that country, but


�žit is an important proviso�žthat some substantial changes are still required, particularly with regard to the most sinister aspects of apartheid, before we can relax our pressure on that Government? It might be unwise for the leader of this country to go to that country before those relaxations have taken place.

Mr. Hurd: My hon. Friend will have noticed how my right hon. Friend the Prime Minister responded to President de Klerk's announcement. I hope that he will agree that that response has been carefully measured. It seems a reasonable and justified first step to ask the President to visit the Prime Minister at Chequers and to say that Mr. Mandela, when free, would also be welcome here.

Ms. Abbott: Does the Foreign Secretary agree that, welcome as Mr. de Klerk's speech was, there were some grave omissions? In particular, there was no reference to the Group Areas Act whereby white people still own 87 per cent. of the land in South Africa and, more significantly still, no reference to one person, one vote. Welcome though the changes in eastern Europe have been, the Government have not seen them as the signal to abandon NATO, so does the right hon. Gentleman agree that it would be premature, on the basis of one speech, to abandon sanctions?

Mr. Hurd: As part of the measured response that I described, we have removed the discouragement given to academic, cultural and scientific contacts. In the present new climate in South Africa, when Mr. Mandela is released, we hope that the ANC and others will agree to join in negotiations in conditions of peace and that the remaining emergency restrictions will be lifted. In that climate, it is logical that we should discuss with our partners in the EEC lifting the voluntary ban on new investment in South Africa.

Mr. Grylls: Although trade matters are for my right hon. Friend the Secretary of State for Trade and Industry, will my right hon. Friend give his views on the relaxation of trade restrictions that remain in South Africa? Would not it be good for people of all races in both countries if we could encourage trade in both directions?

Mr. Hurd: As my hon. Friend knows, there are specific trade restrictions. There is the arms embargo imposed by a Security Council resolution and there are various specific restrictions agreed by the EEC. The logical next step is to discuss with our partners lifting the voluntary ban on new investment.

Sir David Steel: The Foreign Secretary was right to give a warm welcome to the change of heart foreshadowed in President de Klerk's speech, but does he agree that we cannot discuss future democracy in South Africa while the legislative framework of apartheid is still in place�žnot just the Group Areas Act, but the Population Registration Act? It is inconceivable that the rest of the Community will agree to lifting measures until those measures of apartheid are lifted as well.

Mr. Hurd: The underlying importance of what President de Klerk announced is that he has done enough in the minds of most reasonable people to open the way to negotiations. I note that the right hon. Gentleman agrees with that. There is more to come and we are a long way from seeing the end of apartheid, which is our aim and his,

but the next step is to have a reasoned response and the beginning of a dialogue with the ANC and other Africans, which goes along with the release of Mr. Mandela and the lifting of the remaining emergency restrictions.

Mr. Nelson: On a point of order, Mr. Speaker.

Mr. Speaker: Order. If the hon. Gentleman's point of order is to complain that he has not been called, I cannot hear it.

Mr. Nelson: My point of order is exactly the same as the previous one. The Opposition have had three calls on each�ž

Mr. Speaker: Order. I have to be fair to everyone. If on raising a point of order of that kind an hon. Member was called immediately, there would be chaos in this place because I would have points of order all the time.

Mr. Knapman: Further to that point of order, Mr. Speaker.

Mr. Speaker: No, I shall deal with the hon. Gentleman's point of order later.

Hong Kong

Mrs. Gorman: To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on his Department's discussions with Dame Lydia Dunn.

Mr. Hurd: My hon. Friend the Minister of State, Foreign and Commonwealth Office, met Dame Lydia Dunn and Mr. Allen Lee, the two senior members of the Office of the Members of the Legislative Council, on 23 January. They had a useful discussion, in particular about Hong Kong's constitutional development. He assured them, as I had done when I was in Hong Kong last month, that we are taking their views fully into account in making our decisions on this matter. Dame Lydia and Mr. Lee also saw my right hon. Friend the Prime Minister.

Mrs. Gorman: Did my right hon. Friend discuss with Dame Lydia the growing move in Hong Kong towards demanding full democratic rights for the people there now �žsomething that we are applauding all over eastern Europe�žon which basis they could legitimately declare their independence and take their case to the world forum so that they have the right to remain in their own territory? Does he agree that, in the light of what is happening elsewhere in the world and the fact that two thirds of the land of Hong Kong legitimately belongs to Britain in perpetuity, they have a perfect right to do so?

Mr. Hurd: I note my hon. Friend's views in favour of independence for Hong Kong. When I was in Hong Kong I did not meet anyone who shared that view, although I do not deny that there are such people. The great majority of people in Hong Kong accept, albeit reluctantly, that their future is bound up with mainland China. Therefore, they want us to make a success of the concept of one country, two systems.
On my hon. Friend's first point, I hope that it is already clear to everyone that substantially more directly elected seats on the Legislative Council will be introduced in 1991 than was originally envisaged.

Mr. Janner: The Foreign Secretary, like me, has seen the revolting conditions in which Vietnamese boat people live. Did he ensure that their plight was raised with Dame Lydia Dunn? Does he think it right that those people, who come under Hong Kong, and directly ourselves, should sleep in layers of wooden racks surrounded by open sewers? What is to be done about that unworthy, uncivilised and thoroughly disgusting system?

Mr. Hurd: The people of Hong Kong feel extremely strongly that it is because they offered the right of first asylum, and others in south Asia did not, that they are landed with that problem. They feel that the burden, which they have shouldered with the British Government, should be more widely shared. The deduction that I draw from the hon. and learned Gentleman's point is that the sooner we can find ways of returning to Vietnam those in the camps who are not refugees, the better it will be for them and the people of Hong Kong.

Mr. Adley: For the avoidance of doubt, will my right hon. Friend make it clear that the Government's commitment to the 1984 joint agreement remains constant, that Her Majesty's Government recognise that it is the only sensible basis for securing the future of Hong Kong and that they have no intention of trying to renegotiate the terms of that agreement?

Mr. Hurd: The joint declaration and agreement are the right sheet anchor for the future of Hong Kong. My hon. Friend, who follows these matters carefully, will be aware of the anxieties which events last June created in Hong Kong. I and the Government hope that the Chinese will understand that, and take it into account as the drafting of the Basic Law proceeds.

Mr. Kaufman: The right hon. Gentleman will recall that his predecessor, the present deputy Prime Minister, speaking in the House about democracy in Hong Kong, said:
The pace of development should reflect the wishes of the whole community. The unanimous view expressed by OMELCO on 24 May was a significant step towards the establishment of a consensus in Hong Kong."ߞ[Official Report,13 July 1989; Vol. 156, c. 1170.]
I am sure that Dame Lydia Dunn and Mr. Allan Lee told Government representatives what they told me a few days ago�žthat the consensus of OMELCO was that there should be 20 elected members next year and 30 in 1995. If that is the consensus, is it not time, after eight months of consideration following the Tiananmen square massacre, that the Government accepted it and announced that there will be a development of democracy in Hong Kong?

Mr. Hurd: The right to say hon. Gentleman is perfectly right in his description of the consensus of OMELCO. We must take that seriously because responsible people such as Dame Lydia Dunn have stressed to him, to me and to the Prime Minister that the best answer�žthe right hon. Gentleman would not disagree with this, as it flows from the answer that I gave to my hon. Friend the Member for Christchurch (Mr. Adley)�žis an understanding with the Chinese Government that will allow direct elections to the Legislative Council to begin next year, on a substantially higher base than was proposed two years ago, and to continue through 1995 and 1997 and thereafter. We continue to have confidential discussions about that with the Chinese Government which cannot go on for ever. But we have to accept our responsibility for taking the

decisions as regards 1991 and 1995. As I said in Hong Kong, I hope that we shall be able to reach at any rate the first conclusions in the next few weeks.

Mr. Sims: My right hon. Friend is right to say that in considering this matter we have to try to seek agreement between all the parties involved, but will he confirm that if that is not possible and a decision has to be taken in accordance with either the wishes of the Chinese Government or those of the people of Hong Kong, the latter will prevail?

Mr. Hurd: It will be our decision as regards, first, 1991 and then 1995. That is a decision that we must take according to our best judgment, of the interests of the people of Hong Kong, for which we are accountable to the House. No other consideration has any particular bearing on the matter.

Latin America

Mr. Wray: To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on British and European Community policies towards Latin America.

Mr. Hurd: We wish to build up our traditional friendships in Latin America. With the rest of the European Community, we support the return and consolidation of democracy and respect for human rights.
We promote economic progress and trade liberalisation and are keen to co-operate with Latin American countries on other issues such as the environment and the fight against drugs.

Mr.Wray: does the Secretary of State agree that the British Government have neglected Latin America over the past 10 years and have allowed the multinational corporations to exploit its people and remove its resources? Does he agree that it is a scandal that most Latin American countries have a negative gross domestic product of less than 10 per cent? What are the Government going to do about that?

Mr. Hurd: I do not agree with the hon. Gentleman. The fact that our friendship and co-operation with Latin American countries is not in the headlines every day does not mean that they are being neglected. In answer to the hon. Gentleman's first and second points, we were the second largest investor in many Latin American countries in 1989, after the United States. We have invested more in Colombia than has the rest of the world combined. In Brazil, the United Kingdom continued to invest while others disinvested. I am all in favour of encouraging constructive British interest of all kinds in Latin America. I hope that the hon. Gentleman will help us in that rather than whipping us into trying to stir up people in Latin America against the United States.

Mr. Jacques Arnold: Does my right hon. Friend recall our historic cultural relations with Latin America? Should we not put more effort into the activities of the British Council and the related Cuitura Inglesa? Should not we use Latin Americans' enthusiasm for the English language to foster closer ties with Britain rather than with the United States?

Mr. Hurd: We teach the English language better than anyone else and my right hon. Friend is therefore right.

The British Council has additional funds at its disposal this year. Spurred on by my hon. Friend, I shall look carefully at the extent to which Latin American activities can be included in its activities.

Mr. Tony Banks: The Secretary of State said that it was the policy of Her Majesty's Government to promote economic development. What economic development have Her Majesty's Government promoted in Nicaragua? What are Her Majesty's Government doing to promote democratic processes in Nicaragua? Who has Her Majesty's Government sent from this country to observe the elections there on 25 February?

Mr. Hurd: We have a keen interest in the success of the elections in Nicaragua. I hope that the hon. Gentleman will use what influence he has to make sure that, contrary to some suggestions, those elections take place in conditions of fairness and with proper facilities for the opposition. The hon. Gentleman knows that we pay our whack— our share— of EC aid to Nicaragua. We contribute 20 per cent., and in 1988 our share of that aid was £3·3 million

Sir Richard Body: Is my right hon. Friend satisfied that the action planned to protect the rain forests in Latin America, to which this country is contributing a large sum, will protect them and will not cause a net loss of rain forest?

Mr. Hurd: I am not convinced that the efforts being made, which owe a great deal to our initiative, are yielding all the results that they should. I have a meeting in my diary before long with the agencies concerned; that will enable me to discuss the prospects and their activities with them.

E1 Salvador

Mr. Winnick: To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a further statement on the visit by members of the Metropolitan police to El Salvador regarding the recent murder of six priests.

Mr. Maude: A team of three detectives from the Metropolitan police arrived in San Salvador on 6 January and returned on 27 January. During that time they assisted the Salvadorean authorities in the task of bringing to justice those responsible for the murders.

Mr. Winnick: Is it not essential that those who ordered, not necessarily those who carried out, the murders of the six priests, their cook and her young daughter, should be brought to justice? Is the Minister aware that following the ghastly murder of the six priests, Hector Oqueli, the deputy leader in El Salvador of the party affiliated to Socialist International, was also murdered? Is there not a total absence of the rule of law in that country?

Mr. Maude: I am aware of the latter part of what the hon. Gentleman said. He will recollect that we debated the matter briefly last Friday, and that that murder took place in neighbouring Guatemala. It will be for the Guatemalan authorities in the first instance to bring to justice those who were responsible for it.

Mr Speaker: Order. It is my mistake. I was distracted and I called the hon. Member for Gravesham (Mr

Arnold) on Question No. 7 because I thought that we were dealing with his question. I got it out of order. I suppose I shall have to call him again

Colombia

Mr. Jacques Arnold: To ask the Secretary fo State for Foreign and Commonwealth Affairs if he will make a statement on Britain's relations with Colombia

Mr. Maude: We have excellent relations with Colombia. President Barco will be a welcome visitor when he addresses the world ministerial drugs summit here in April

Mr. Arnold: Does my hon. Friend recall the carnage in Bogota last December in which a narco-terrorist bomb aimed at the security police went off killing 70 people , wounding 1,000 and causing immense devastation within a radius of 2 km? Has he noticed recently the disarming of a similar bomb of 500 kg in a car park beneath a building in Bogota? Is he aware that it was disarmed by British "wheelbarrow" remote control bomb disposal equipment? Is that not a practical way in which Britain can help President Barco in his fight against the narco-terrorists? Should not we be doing more?

Mr. Maude: I vividly remember the devastation and carnage to which my hon. Friend referred. He is right to note that the practical help that we have given to the Colombian authorities has been very much appreciated by them and has already had direct and measureable benefits for the people of Colombia, by helping the authorities to win their war against the narcotics dealers and traders. I shall certainly see whether we can do more. I think my hon. Friend will recognise that we were very quick to provide immediate practical assistance

Mr. Corbyn: Does the Minister agree that in addition to the appalling terror perpetrated on the people of Colombia by the drug barons, there is also a serious problem of human rights abuses by the police and armed forces against human rights workers, peasant leaders and trade unionists? When he next meets the Government of Colombia will he press upon them the real concern of many people round the world about the fate of trade union leaders, peasant leaders and others who seek to bring genuine peace, freedom and democracy to Colombia?

Mr. Maude: There is concern about human rights abuses in Colombia. There is no reason to suppose that the Colombian Government are involved in those abuses. None the less we express concern to the Colombians whenever it is suitable

Mr. Heffer: On a point of order, Mr. Speaker. When did Question 9 come before Question 8? We were discussing No. 8. If you have made a mistake—

Mr. Speaker: Order. The hon. Gentleman was not listening. What I said was that, due to a distraction at the Chair, I called the hon. Member for Gravesham (Mr. Arnold) on the previous question. I had not intended to do so. We were on Question 9. I now call Question 10

Mr. Heifer: Then you called Question 9

Mr. Speaker: If the hon. Gentleman looks at the Order Paper, he will see that Questions 8 and 9 are very similar and that 9 comes after 8

Lukanov Inquiry, Bulgaria

Mr. Stern: To ask the Secretary of State for Foreign and Commonwealth Affairs if he has yet received any request to contribute any information to the Lukanov inquiry in Bulgaria

Mr. Waldegrave: We have been asked by the Bulgarian Government to help, and will naturally do what we can

Mr. Stern: I am grateful to my hon. Friend for that reply. Is he aware of the persistent rumour in Bulgaria that much of the money secreted by the Zhivkov regime was laundered through London? Will he ensure that before complying with any possible request from the new Bulgarian regime he seeks out the destination of that money?

Mr. Waldegrave: As I said, we will respond positively to any sensible request that we receive from the Lukanov commission

Mr. Faulds: Will the Minister suggest to the Bulgarian Government that their inquiry should also look into the implications of the death of Hugh Gaitskell?

Mr. Waldegrave: That had not occurred to me.

Drug Misuse

Mr. Butler: To ask the Secretary of State for Foreign and Commonwealth Affairs what contribution he or his Department expects to make to the forthcoming special session of the United Nations assembly concerned with drug misuse

Mr. Hurd: I shall be going to the special session. The United Kingdom will work for a commitment to improving the effectiveness of the United Nations effort against drugs, and for agreement on a practical programme of international action, including ratification of the relevant United Nations conventions, measures to strengthen the monitoring of the movement of precursor chemicals, and undertakings to develop a network of agreements to trace, freeze and confiscate the proceeds of drug trafficking

Mr. Butler: Will my right hon. Friend press for the appointment of a United Nations drugs czar to co-ordinate the present efforts?

Mr. Hurd: I am not sure about a drugs czar. If my hon. Friend means that there is a certain diffusion or scattering of United Nations effort through the different agencies in Vienna, he is on to something. That is what I meant when I referred, in Foreign Office language, to the
effectiveness of the United Nations effort".
We need to ensure that our contributions to that effort go where they are needed in the prevention of drug trafficking

Mr. Vaz: Does the Foreign Secretary share my concern that the draft programme that he has put in the Library for the United Nations conference in London has no special session covering young people and the reduction of drug demand? Does he agree that at a conference of that kind, which will attract people from all over the world, it is very important to have people with direct, relevant experience of drug-taking? With respect, long speeches by the Prime

Minister and others who have not had direct, relevant experience of drug-taking will not help us solve the problems.

Mr. Hurd: I note the hon. Gentleman's suggestion. He is perfectly right: the next big date on the calendar for drug misuse is our summit meeting here in Britain from 9 to 11 April. The agenda will have two points: the reduction of demand and the specific threat from cocaine and crack. It is important that those who discuss reduction of demand should have a vivid representation before them of what they are talking about. The hon. Member will have noticed that President Bush has steered the latest version of the United States anti-drug programme to demand reduction, and he will have noticed our own major new programme recently announced in that connection.

Mr. Wells: Does my right hon. Friend agree that reduction in the supply of drugs is extremely important in dealing with drug misuse? Will he therefore make certain that at this United Nations special conference there is discussion of alternative crops in the countries where drugs are produced? In particular, will he turn his mind to the consideration of banana production, which is an alternative to drug production in Colombia and much of Latin America, and to the prevention of the deleterious effect of the enormous increase proposed in Santo Domingo's supply of bananas to the European Community?

Mr. Hurd: My hon. Friend is subtly leading me from one subject to another—from drugs to bananas. He is perfectly right to say that where it can be shown that crop substitution is enforceable, it is right to support it—as we do, for example, in Pakistan. Enforceability is important as a great deal of money could be wasted otherwise.

Mr. Sheerman: Will the special assembly take Britain's contribution seriously if it realises that Britain is not taking on those banks which we know are heavily involved in laundering drug money and are operating freely in the City of London? Is it not time that the right hon. Gentleman talked to his colleagues to ensure that something is done about that scandal?

Mr. Hurd: The hon. Gentleman's rhetoric is about four years out of date. This Government have been the pioneers in putting the necessary legislation through Parliament, in bringing that legislation into effect, and in negotiating agreements —of which there are now 13—with countries that have followed the same route. It is not just a United Kingdom effort, but an international effort. The hon. Gentleman knows that it is continuing and is beginning to produce useful results.

Hong Kong

Mr. Andrew MacKay: To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a further statement on representations he has received from the people of Hong Kong on proposed direct elections in the colony.

Mr. Maude: We have received many representations from a broad cross-section of the community in Hong Kong. We shall take full account of the views of the Hong Kong people in taking our decisions about the development of the territory's political system.

Mr. MacKay: Is my hon. Friend aware that many of us think that the OMELCO proposals have much to recommend them as a move towards direct elections in the colony? However, we are disappointed with the Chinese Government's response and hope that under no circumstances will their belligerent response influence my right hon. and hon. Friends' final decision.

Mr. Maude: As my right hon. Friend the Foreign Secretary said, our decision—and it is our decision—for 1991 will be taken on what is, in our judgment, in the best interests of Hong Kong. The process of arriving at that judgment will be heavily influenced by the views of Hong Kong, which have been channelled through and articulated by OMELCO.

Mr. Shore: When does the Minister expect the Chinese Government to publish their final version of the Basic Law? If he is expecting that publication in the near future, it would make sense for the British Government to announce their views and decisions on the extent of direct elections before the Chinese Government publish their view in the Basic Law, so that we are not seen to be—as many expect anyway—simply following the Chinese.

Mr. Maude: The process of evolving the Basic Law has been continuing for a little time. The right hon. Gentleman will know that special groups on particular aspects of it have been meeting in recent weeks. The plenary session of the Basic Law drafting committee meets during next week, but that is not the end of the road. There is a further stage. As my right hon. Friend said, we have been engaging in confidential discussions with the Peking Government to ensure that, as far as possible, Hong Kong opinions are taken fully into account in the formulation of the Basic Law provisions.

Mr. Ian Taylor: Does my hon. Friend agree that progress in democracy in Hong Kong is only one of three parts of the British policy of maintaining stability? The others are the essential need to give passports to the 50,000 heads of families, and the necessity to deal properly with the Vietnamese refugees. Will he confirm that the world community—perhaps with the exception of the United States—now accepts that economic refugees must return to Vietnam? What is the Government's policy for helping Vietnam?

Mr. Maude: The whole international community, including the United States, has accepted the principle of mandatory repatriation of those who are determined by the proper authorities not to be political refugees. Everyone has agreed, including the United Nations High Commissioner for Refugees and the United States, that economic migrants have nowhere to go except back to Vietnam. There is no dissent on that point. The continuing argument is on when that process should be resumed. The Government believe that to give Hong Kong the confidence to face its future, we need to send a clear signal that no one should come from Vietnam because there is no promised land waiting for them.
As for what we are doing to help Vietnam, we have said in the past that we are prepared to contemplate a resumption of aid to Vietnam as long as Vietnam lives up to its international obligations.

Namibia

Mr. Caborn: To ask the Secretary of State for Foreign and Commonwealth Affairs what information he has on the foreign debt incurred by the South African illegal administration in Namibia

Mr. Waldegrave: Namibia's national debt totalled just over 716 million rand at 31 December 1989.

Mr. Caborn: I do not quibble with the figure, although I think that it is a little higher at 820 million rand. I think that the Minister will agree that those loans were illegal, both in terms of international law and in terms of United Nations Security Council resolution 435. In the light of that, will he make sure that the South Africans who loaned that money to the illegal regime in Namibia will face their responsibility? The £220 million-odd debt should not be loaded on to the new Administration in Namibia which will be undertaking total reconstruction and will therefore find it difficult to repay such an amount.

Mr. Waldegrave: The negotiations on this matter and on other aspects of the financial and commercial relationships between an independent Namibia and South Africa are now going forward. It would be unwise of us outside to lay down on what is about to be an independent Namibia its exact balance of interests. Namibia needs access to South African markets. There have been transfers—illegal transfers, one might say—from South Africa to Namibia in the past. The negotiation is complex and we must leave it to the independent Namibian Government to settle the matter.

Mr. Nicholas Winterton: Does my right hon. Friend agree that while we need to consider now what aid we can give to an independent Namibia, we should not concentrate on the negative aspects of any South African legacy, but should concentrate on the wonderful infrastructure that the South African administration has left in Namibia in the form of roads, reservoirs, welfare, education, health and industry. We should wish that country every success, prosperity, peace and happiness for when it becomes independent on 21 March.

Mr. Waldegrave: I hope that the whole House will support my hon. Friend's latter sentiment. I hope that the external supporters' club of SWAPO will note how far it is being left behind by the moderation of Mr. Nujoma and his colleagues who are very anxious to keep in Namibia many of the South African technicians and others who they realise are essential for Namibia's prosperous future.

West Bank

Mr. Ernie Ross: To ask the Secretary of State for Foreign and Commonwealth Affairs if he will instruct the consul general in east Jerusalem to continue to monitor alleged breaches of the fourth Geneva convention in the occupied West Bank and Gaza

Mr. Waldegrave: We take a close interest in Israeli human rights practices in the occupied territories, in accordance with our rights as a signatory to the fourth Geneva convention.

Mr. Ross: At the end of last year the British consul general made a number of direct interventions in connection with allegations of serious violations of


international humanitarian law and was criticized for doing so by the Israeli authorities Will the Minister assure the House that Ivan Callan will be given every encouragement to continue these efforts towards fulfilling Britain's obligation to ensure respect for the ensure respect for the fourth Geneva convention, especially with regard to graves breaches?

Mr. Waldegrave: Mr. Callan, whom I know very well, has done nothing without instructions from the British Government. He has done nothing outside his proper role and we support him in everything that he has done.

Mr. Temple-Morris: Does my right hon. Friend agree that what is going on in the West Bank and Gaza is a disgrace and, more importantly, a continuing disgrace? Does my right hon. Friend see that as a challenge to European political co-operation about which we hear so much, but the results of which. at the end of the day, are sometimes difficult to see? In the European context, will my right hon. Friend cause an approach to be made to the United States to get a joint effort to tell Israel to stop and to deal?

Mr. Waldegrave: We are in close touch with the United States and strongly support its efforts to start direct dialogue between Palestinians and Israelis. I cannot answer a question on this subject today without drawing to the attention of the House the terrible act of terrorism in which many Israeli and some Egyptian lives were lost. We deplore such actions by the enemies of the peace process.

Mr. Kaufman: In supporting what my hon. Friend the Member for Sheffield, Central (Mr. Caborn) and Conservative Members have said about breaches of human rights, may I join the Minister of State in condemning in the strongest possible terms the terrorist

outrage against the Israeli tourist bus which led to the deaths of innocent Israelis and Egyptians? Does he agree that perhaps the only hopeful sign to emerge from that atrocity was the immediate condemnation of the outrage by the Palestine Liberation Organisation? Does he agree that that kind of murder and atrocity makes even more important the speeding up of the middle east peace process to avoid the loss of more innocent lives—Israeli, Palestinian or any other?

Mr. Waldegrave: Not for the first time on this subject, I wholly agree with what the right hon. Gentleman has said. The fact that a number of the extremist organisations that are locked in battle with the present leadership of the PLO have, whether rightly or wrongly, claimed responsibility for the atrocity only confirms that the central leadership of the PLO is committed to the peace process at the present time.

Mr. Tredinnick: Does my right hon. Friend agree that, with democracy sweeping through eastern Europe and through repressive regimes, the Israeli Government will be swimming against the tide if they attempt——

Hon. Members: They are swimming against the tide.

Mr. Tredinnick: Does my right hon. Friend agree that they will be continuing to swim against the tide if they refuse to grant democratic rights to people on the West Bank and in the Gaza Strip?

Mr. Waldegrave: One of the ironic, perhaps even tragic, contrasts has always been that between, on the one hand, the vibrancy and legitimacy of Israeli's own democracy and its attachment to that democracy and, on the other, its unwillingness to concede similar rights to the Palestinian people.

Points of Order

Mr. Tam Dalyell: On a point of order, Mr. Speaker. It will be known to you that a Select Committee of this House—the Select Committee on Defence—has decided, as is its right, to look at the affair of Colin Wallace. First, how, if at all, does this affect your decision when you took avizandum—if that is the right expression—on the whole question of Colin Wallace and privilege? Secondly, may I have an assurance that it will in no way inhibit what is said, hopefully to the Attorney-General, in the Adjournment debate on Monday? Thirdly, in relation to what may be Table Office difficulties relating to the rules of advice to Ministers, will we be able to probe the Minister's statement to my right hon. Friend the Member for Chesterfield (Mr. Benn) in the Adjournment debate last night that no clearance—the word used was "clearance"—had been given? Is clearance advice to Ministers, or can we probe a good deal further as to what exactly what was meant by the statement that no clearance had been given for Clockwork Orange?

Mr. Speaker: As to the hon. Gentleman's last question, I shall have to see the questions that were asked yesterday before giving him a reply. So that is hypothetical. In reply to the hon. Gentleman's first question, I can say that the investigation by the Defence Select Committee will not affect any decision I may take. Secondly, the hon. Gentleman may certainly proceed with his debate without any concern.

Sir Jim Spicer: On a point of order, Mr. Speaker. It may be that the combination of television coverage and Foreign Office questions is inevitably a good mix, but have you, Sir, noticed that during the course of Foreign Office questions we tended to move from questions to speeches? Would it be possible for you, particularly in relation to Foreign Office questions, to remind all hon. Members that it is Question Time and that we are not taking part in debate?

Mr. Speaker: That point of order is helpful from the point of view of the Chair. I know that we in this House take no account of television, but the truth is that it is very difficult to proceed down the Order Paper if we have long questions and long replies.

Mr. Anthony Nelson: On a point of order, Mr. Speaker. In respect of Question Time, may I put to you a point that I think affects the rights of all Back Benchers? I know that you try to achieve the impossible—being fair to all of us—and that no Member has a right to complain even though he may be disappointed at not having been called. However, a real problem arises when a major issue is being dealt with—and, arguably, South Africa is that issue today.
Sixty per cent.—six out of ten—of questions come from the Opposition. The practice that you, Sir, adopt—for reasons that one understands—is to call Government and Opposition Members alternately. If the next question on the Order Paper happens to arise on the alternate call you will move on. That results occasionally in commentary on a major issue being out of balance, as was the case today when Members on the Government side were called in a quite small proportion to comment on South Africa.

Mr. Speaker: Order. If the hon. Gentleman looks carefully at Hansardtomorrow, he will see that that is not true. The Procedure Committee has asked me to speed up Question Time. My predecessor, Dr. Horace King—

Mr. Andrew Faulds: Do not quote him, for God's sake.

Mr. Speaker: I have started, so I shall finish. Mr. Speaker King used to get through 40 questions in an hour, whereas we got through only 14 today. The House may well agree that it would be fairer if we were to get more quickly through questions, but that inevitably means fewer supplementaries.

Mr. John Butterfill: On a point of order, Mr. Speaker. It was not possible today, because of the way that the questions were selected, to ask any questions on the European Economic Community. On a day when my right hon. Friend the Foreign Secretary returned from important meetings in Germany, that was unfortunate. Is there any possibility of you making arrangements with my right hon. and learned Friend the Leader of the House—[HON. MEMBERS: "No."]—to ensure that such an imbalance can be redressed?

Mr. Speaker: That matter has already been studied carefully by the Procedure Committee. There used to be a 15-minute slot in Foreign Office Question Time specifically for European questions. If the hon. Gentleman feels that we should go back to that, he should make his representations there. I judge from the comments that I hear that it might not be particularly popular.

Mr. Dennis Canavan: On a point of order, Mr. Speaker. I rise to support you this time, although I have had occasion to complain about the lack of balance and the lack of fairness towards the Opposition during Scottish Question Time. It is worth pointing out to the hon. Member for Chichester (Mr. Nelson) that, if we take into account the contributions from the Treasury Benches, the Tories get the lion's share of any Question Time—about three quarters of it—so they cannot complain about lack of balance. On top of that, the Minister —

Mr. Speaker: Order. The House has given the Chair the responsibility of ensuring a fair balance. I assure the House that I take this duty very seriously.

Mr. Tony Banks: On a point of order, Mr. Speaker. I am an assiduous attender at Question Time. There is a great deal of pressure on you to call hon. Members, and I am deeply grateful that you called me this afternoon. I think that you are wonderful.

Mr. Speaker: I thank the hon. Gentleman very much, and I reciprocate.

Mr. Tony Marlow: On a point of order, Mr. Speaker. I venture to suggest that this may be of more interest to the majority of hon. Members than the antics of Mr. Colin Wallace, that dubious Walter Mitty who was active mainly during the depressing and dismal interlude represented by the last Labour Government. We gave certain powers to the Select Committee dealing with the experiment of televising the House. Who decides how far and wide those powers go? Is it you, the Select Committee or the House?

Mr. Speaker: The Select Committee, which will bring its recommendations to the House.

Mr. Marlow: Further to that point of order, Mr. Speaker. Last week, in answer to a parliamentary question, the Select Committee made suggestions about changes in the experiment, but those suggestions were not brought before the House—they were merely introduced. I am not saying that it is outside the broadcasters' terms of reference, but should they come forward with a suggestion for something outside their terms of reference, who is to judge that situation? Is it you, the House or the Select Committee untrammelled on its own?

Mr. Speaker: This is a matter for the Select Committee. I hope that the House and the hon. Gentleman will accept that we are engaged in an experiment, and without changes we cannot experiment. We need to see whether the changes, which may themselves be varied from time to time, are beneficial, or not.

Mr. Brian Wilson: On a point of order, Mr. Speaker. I raise a matter which I imagine will not attract the attention of many hon. Members. Yesterday, in a written answer in the House of Lords, the centrepiece of legislation which went through both Houses at inordinate length and which has been lying about for four years suddenly disappeared. I refer to the Salmon Act 1986 and, with it, the salmon dealer licensing scheme.
Is it in order, Mr. Speaker, that the central core of a measure which has gone through both Houses of Parliament should be withdrawn by press release and written answer? Many uncertainties were created by that legislation, many people were waiting for its implementation and much advice was offered against the spirit of what was contained in that legislation. Is it right that, as it were, with a snap of the fingers, the whole thing should have disappeared as the result of a written answer?

Mr. Speaker: I thought that the hon. Gentleman proposed to ask me if I had received a request for a statement on the matter. Although he has not asked that question, I will give him the answer to it, which is that I have not. He must take up with the Government Department concerned the matter that he has raised with me.

BILL PRESENTED

EDUCATION (SCHOOL GOVERNING BODIES)

Mr. Jack Straw, supported by Mr. Barry Jones, Mr. Derek Fatchett, Ms. Hilary Armstrong, Mr. Andrew Smith, Mr. Win Griffiths, Mr. George Howarth and Mr. Tom Cox, presented a Bill to amend the law relating to appointments by local authorities to school governing bodies: And the same was read the First time; and ordered to be read a Second time on Friday 9 March and to be printed. [Bill 69.]

Mr. Speaker: I understand that the hon. Member for Canterbury (Mr. Brazier) is not able to move his ten-minute Bill today on one-parent families.

Social Security

The Secretary of State for Social Security (Mr. Tony Newton): I beg to move,
That the draft Social Security (Contributions)(Re-rating) Order 1990, which was laid before this House on 18th January, be approved.
I understand, Mr. Speaker, that it will be convenient also to consider the following motions:
That the draft Social Security Benefits Up-rating Order 1990, which was laid before this House on 18th January, be approved.
That the draft Statutory Sick Pay (Rate of Payment) Regulations 1990, which were laid before this House on 18th January, be approved.
That the draft Guaranteed Minimum Pensions Increase Order 1990, which was laid before this House on 18th January, be approved.
I imagine that the main interest of the House, and therefore the main focus of the debate, is likely to be on what is in the uprating order, and in at least one respect what is not in it. But first I should outline the purpose and content of the other three instruments.
I take first the contributions re-rating order, conscious, in the wake of having been mildly rebuked by a distinguished observer of our proceedings for a certain want of jollity during Question Time earlier this week, that the scope for bringing jollity to the discussion of national insurance contributions is limited indeed. The order is concerned with the national insurance contributions which determine people's entitlement to pensions and other important contributory benefits, and which are the source of finance for over half of what is spent in this country each year on social security.
It is rather odd that the House devotes so much less time to discussing those contributions than to matters of taxation, given that there are many people for whom national insurance contributions are larger than any tax liability they may have and that the total paid in such contributions amounts to about two thirds of the total collected in income tax.
The most notable feature of the re-rating order is that, for the seventh year in succession, it makes no increase in the main rates, the class 1 rates paid by employed people and their employers. As the House will be aware, however, there are boundaries for contribution liability, known in the jargon of the trade as the lower earnings limit—LEL—and the upper earnings limit—UEL—and those will change as usual. The LEL applies to both the employer's and employee's share of contributions; the UEL to the employee's share only. The order itself does not set those two earnings limits; that is done by a set of regulations to be laid after the benefits uprating order has been approved. But I should remind the House that the LEL, which is linked by law to the nearest pound below the retirement pension rate, will be £46 a week and that the UEL, for which there is somewhat greater flexibility, will be £350 a week.
The House will recall that in 1985 we reduced the contribution rates paid by lower paid workers and their employers to help those workers and to reduce employment costs. The reduced contribution rates will significantly cut the impact of contributions on people with lower earnings without affecting their benefit entitlement in any way. From 5 October 1989, we built on that process by further restructuring the employee's


element of class 1 contributions, again without affecting benefit entitlement. People who earn less than the lower earnings limit will still pay no contributions but will pay an initial entry fee, as it might be called, of 2 per cent., charged on earnings at the lower earnings limit. The standard 9 per cent. is charged on that part of any earnings that exceed the lower but not the upper earnings limit.
The effect of the 1985 and October 1989 changes taken together was to reduce contributions of every contributor by just over £3 per week, which clearly was of particular help to the lower-paid. I very much welcome that, as I am sure do all right hon. and hon. Members. Although the order makes no further change to the rates, the effect of the increase in the lower earnings limit will be to reduce most employees' contributions by 21p per week, or by 15p per week if they are in contracted-out employment.
The effect of raising the upper earnings limit is that those having earnings of £350 per week or more will pay an extra £2·04 per week, or £1·60 per week if they are contracted out.
Employers' contributions, which have a somewhat different structure, were not affected by last October's changes. However, as on previous occasions, the re-rating order provides that the earnings limit below which they pay lower contribution rates will be increased roughly in line with inflation, rounded to the nearest £5. From April, employers' contributions will be at 5 per cent. in respect of employees earning between the lower earnings limit and £79·99 per week; 7 per cent. for those earning between £80 and £124·99; 9 per cent. between £125 and £174·99 per week; and 10·45 per cent. for those earning more than £175 per week.

Mr. Tony Banks: I am trying to follow the Secretary of State, but he is reading his brief very closely and I should not be surprised if the people at the receiving end of all that information could not understand it. I cannot pretend that I do. I shall put to the right hon. Gentleman a point made to me by those representing welfare rights in Newham, who say that, although a person earning £84 per week in 1989–90 would receive £52 per week statutory sick pay, that same person claiming after April will receive only £39·25, unless he or she receives a pay rise of 49 per cent., taking their income to £125. If that is so, the new arrangement represents a real cut for people at lower income levels.

Mr. Newton: Having considerable experience of the subject myself, I sympathise with the hon. Gentleman's difficulty in understanding the complexities of national insurance contributions. However, they have relatively little to do with the point that he makes. I shall deal shortly with the Statutory Sick Pay (Rate of Payment) Regulations 1990, which are in the batch before the House this afternoon, when the answer to the hon. Gentleman's question will become clear. Meanwhile, I have little alternative but to plough on through the complexities of the Social Security (Contributions) (Re-rating) Order 1990 as briefly as I can.
In 1990–91, class 1 contributions, which are the ordinary contributions that most people make, are expected to yield £32 billion. As is the case with contributions made in all classes, that revenue will be apportioned between the national insurance fund and the

National Health Service. Self-employed people pay national insurance contributions in two portions—the flat-rate class 2 contribution and the profits-related class 4 contribution. We do not propose any change to the class 4 rate, which will remain at 6·3 per cent. in the coming year. The profits limit for class 4 contributions, which determine the level of profits on which contributions are payable, will increase in the normal way and broadly in line with the earnings limit for class 1 contributions, to £5,450 and £18,200 respectively.
The upper profits limit is exactly 52 times the class 1 upper earnings limit. We propose also to increase the class 2 contribution by 30p to £4·55 per week from next April. The class 2 rate is broadly linked to the class 1 lower earnings limit, and its increase reflects the proposed rise in that limit.
In somewhat different terms, the result of all this is that self-employed people with profits at or below the present lower limit of £16,900 will pay about £25 less in class 4 contributions per year. Those with profits above the proposed upper limit of £18,200 will pay about £57 more. Self-employed people are expected to contribute about £1,200 million overall in contributions in 1990–91.
Finally, certain categories of people—for example, those who are not gainfully employed or receiving contributions credits, such as people who retired before the age of 60—can pay class 3 contributions if they wish; they are voluntary contributions. We propose to increase class 3 contributions by 30p, making them £4·45 a week.
Before leaving this tangled question of national insurance, I should note that, as usual, the Government Actuary's report on the effect of our proposals on the national insurance fund has been laid with the re-rating and uprating orders. Having referred to the report at some length in my speech on Second Reading of the Social Security Bill on 22 January, I shall merely remind the House now of what I consider to be its essential points.
The expected balance of the fund in the present year, at 34 per cent., is more than twice the Government Actuary's recommended minimum. Although, in 1990–91, expenditure is likely to exceed income, the balance is expected to remain at 25 per cent., which is well above the minimum. While a problem could have been foreseen had that trend continued in subsequent years, it should be overcome by the proposals in the Social Security Bill to transfer from the national insurance fund to the Consolidated Fund payment of industrial injuries benefits, statutory sick pay and statutory maternity pay. Since none of those is a national insurance benefit in the ordinary sense, as they do not depend on a contribution record, in my view, as the House knows, that is a sensible move in any case.
I now turn to the draft Statutory Sick Pay (Rate of Payment) Regulations. Those regulations were referred to the Social Security Advisory Committee, and its report, together with my response, is also before the House. There are three main elements in the regulations. The first is to increase the lower rate of statutory sick pay by £3 a week, to £39·25, an increase of rather more than simply matching inflation would have required. That will improve the position of low-paid workers who experience short-term sickness. That has been widely welcomed, as has the knock-on effect of a modest real increase in the entitlement of more than 200,000 women receiving statutory maternity pay, since the SMP rate is the same as the lower SSP rate.
As is the way of the world, comment has tended to ignore that aspect of the proposal and to concentrate on


the other two elements of the regulations, which are the more limited increase of 40p, bringing the higher SSP rate to £52·50, and the increase from £84 to £125—that directly relates to the point that the hon. Member for Newham, North-West (Mr. Banks) raised—in the weekly earnings limit, above which the higher rate is payable. The concerns that have been expressed, and which he reflected, on the latter proposal are fairly reflected in the Social Security Advisory Committee's report, but for the reasons set out in my formal response the Government do not believe that those concerns are justified and they therefore do not intend to depart from the proposals, which have been conceived as a whole. Therefore, it would have been necessary to reconsider also the position on the real increase in the lower rate of SSP and SMP, which has been generally welcomed.
In commending this order to the House and, at the same time, commenting on the point that the hon. Gentleman raised, I shall simply ask hon. Members to bear in mind three matters. First, since 91 per cent. of employees are now covered by occupational sick pay schemes, and 83 per cent. of those schemes in the private sector now top up SSP to full pay and most of the rest to at least half pay, very few employees are likely to be affected in practice in the way that the hon. Gentleman's constituents have suggested. There will be a change in the balance of what they receive—between what the State provides through SSP and what the employer provides through an occupational sick pay scheme—without affecting the individual. We expect that in practice very few employees will be affected.

Mr. Tony Banks: I am grateful to the Secretary of State for his patience in taking me through this highly complicated point, which I now understand better. Although he says that very few employees will be affected, has he any estimates? This matter has been raised with me by people in Newham, and I should not like anybody in Newham to lose under the provisions which have just been announced. Has the Secretary of State any estimate of the numbers involved, and what will he do if examples are brought to his attention of people who are manifestly losing out?

Mr. Newton: I shall make three points in response to the hon. Gentleman. First, if he investigates the circumstances of everyone in Newham, as I am sure he does assiduously as a Member of Parliament, he will certainly find a fair number who are likely to gain. They will be either quite low-paid workers who will be helped by the increase in the lower rate of SSP, or women having babies who will be helped by the small real increase in the rate of SMP.
Secondly, I cannot give the hon. Gentleman a detailed figure of the sort he requires. Many of the theoretical effects will happen only if someone is sick. We think that about 290,000 spells of sickness might theoretically be effected. However, to know who is going to be sick and relate that statistic to the occupational sick pay scheme which they may or may not be in is a task that would be beyond even my Department's excellent statisticians.
Thirdly, even at the present rate, somebody with substantial numbers of dependants would be likely to need—as they would be entirely entitled to if they were on only SSP—some topping up from income support or housing benefit. That remains open under the new arrangements in precisely the same way as it does at present.
The £125 dividing line, apart from the slight administrative advantage for employers of alignment with the dividing line which also exists in relation to contribution payments—the point that the hon. Member for Newham, North-West (Mr. Banks) noticed earlier—does no more than restore the balance of numbers between those receiving the standard rate of SSP and the lower SSP rates to where it was when the SSP scheme started in 1983.
While the proposal undoubtedly means that employers will bear a slightly greater proportion of the costs of short-term sickness, the actual amount involved—about £80 million—is small in relation to total labour costs in the economy of more than £250,000 million. Overall, I have no doubt that this relatively modest restructuring is a sensible and reasonable one, taking account of the many pressures for social security expenditure in sectors for which only the state can provide.
You, Mr. Deputy Speaker, will be glad to hear that I need address the third instrument only briefly—

Mr. Tim Smith: What information has my right hon. Friend the Secretary of State about the 9 per cent. who are not covered by occupational sick pay schemes? Does not common sense suggest that they are more likely to be part-time, and therefore low-paid, people, who will benefit, not lose, from this change in the arrangements?

Mr. Newton: Common sense suggests that, as I implied when I originally announced this in my original uprating statement. That is one reason why I would expect many people to be helped by what I have done with the lower rate of SSP, which is likely to be disproportionately helpful to those lower-paid and part-time workers who may not be in occupational sick pay schemes.
If only to take the opportunity to encourage more employers to do this, I must say that one encouraging factor is that employers generally are tending to extend their occupational schemes to part-time as well as full-time employees. Not least because of its effect on so many married women, that is something that I welcome and would wish to encourage.
As for the Guaranteed Minimum Pensions Increase Order 1990, in line with my statutory duty under the Social Security Act 1986, the order obliges occupational pension schemes that are contracted out of the state earnings-related pension scheme to provide post-award increases in guaranteed minimum pensions, earned in the tax year 1988–89, of 3 per cent. from 6 April this year.
The main uprating order follows the announcement that I made to the House in October about the generality of social security benefits rates that will be payable from 9 April 1990. It provides for an increase in retirement pensions, and in virtually all other benefits that are not income related, of 7·6 per cent. That is the increase in retail prices that took place between September 1988 and September 1989. As for income-related benefits, the order provides for a general increase of 5·2 per cent., which is the increase in retail prices, other than housing costs, over the same period. That difference, as is now well understood, reflects the fact that for people on income support there is generally direct assistance with housing costs, either through the payment of their mortgage interest, or some part of it, or through housing benefit.
Rather than rehearse all the many benefit rates to which those general increases give rise, which are set out in the


order, it will be more helpful to concentrate on the ways in which its provisions depart from the general pattern that I have just outlined. They are quite numerous. On the one hand, the rate of child benefit remains unchanged. On the other hand, there is an extensive range of specific improvements that go well beyond the basic uprating percentages. They are closely associated with a number of important extensions of benefit coverage that we are making in other ways, especially for disabled people and their carers.
The House will recall what I said about child benefit in my uprating statement. The requirement is to review the level of child benefit each year, taking account of all relevant considerations. Having done so, I came to the conclusion that other claims should, on this occasion, be given priority over those of a general increase in that benefit, particularly since such an increase of itself does nothing to improve the relative position of those who are least well off—the families on income support or family credit.
I do not intend to repeat everything that I said on that occasion, but I shall make one observation which I hope hon. Members will bear in mind. Targeting—or whatever word we want to use—is not simply a matter of increasing benefits that pay regard to people's exact financial circumstances—the income-related benefits—rather than those which do not. It also involves making judgments about the needs of different groups at a particular time and the relative weight of their claims to any additional resources that can be made available.
The incomes of people in work, which include the great majority of families with children, have been rising fast. Over the past year alone, the take-home pay of a married man on average earnings, including the effect of the £3-a-week reduction in national insurance contributions, has risen by about £20 a week. In the numerous cases where both partners are working, the overall increase in family income will have been even more.
Against that background, I do not think that it was unreasonable to judge that the prior claims at this time lie in other quarters: families with children who are out of work or in low-paid jobs, the less well-off pensioners and—very much not least—disabled people, their carers and families with disabled children. It is on those groups that we focused additional help, both in the measures that we implemented last October and, in this order and in what we are doing in other ways.

Mr. John Battle: I am sure that the Secretary of State accepts that one of the primary causes of the classic poverty trap is those on low pay who are not earning the average wage of £258 a week, according to the Department's latest figures. Does not child benefit cut through the poverty trap because it is not means-tested? It reaches, therefore, precisely those families who cannot claim other benefits but whose take-home pay is too low to qualify either for tax concessions or for other benefits. Does not the Secretary of State accept that it breaks helpfully and progressively through the poverty trap?

Mr. Newton: I do not accept the full implication of that. As the House knows from what I have said on numerous occasions, the more effective way of tackling that problem is the one that we adopted with the move from family

income supplement to family credit, a significantly more generous benefit than its predecessor. I refer also to the efforts that we are making to channel amounts averaging £27 a week in family credit to low-paid working families with children.
At the same time, we made changes that constituted an important aspect of the reforms introduced in 1988. Although they did not eliminate—I would not pretend that they did—the problem of high marginal rates of withdrawal associated with income-related benefits, they certainly mitigated those effects and, above all, virtually reduced to nil the number of people who could make themselves worse off by increasing their incomes. The hon. Gentleman is student enough in this area to know that we are discussing intractable problems. I do not want to over-simplify; I am sure that he does not want to, either. I do not entirely agree with his point, and I emphasise what we have sought to do by means of family credit.

Mr. Michael Meacher: If the argument is about better targeting for the low-paid, why are the Government making cuts that amount, in the case of child benefit over the past three years, to £250 million, of which only £70 million—about 28 per cent.—will go to families in respect of family credit? Is not the right hon. Gentleman being a little dishonest by trying to pretend that the argument is not really about cuts?

Mr. Newton: I am not being dishonest. It has just become apparent that the hon. Gentleman must have switched off during the past few minutes when I was talking about what I understood by targeting.
Targeting is not merely a matter of picking out some money that has been going in one universal direction and deciding to add an income-related direction as well. We look more broadly at the various groups in the population and consider where it is necessary to direct extra help——

Mr. Meacher: That is a diversion.

Mr. Newton: I do not think so. I have made it clear that one aspect that has been in the Government's mind is the extent to which there has been a rapid and considerable increase in the standard of living, real incomes and cash incomes of the great majority of those in work, who include the great majority of families with children.
Against this background, we thought that priority should be given not only to low-income families with children, including those out of work, but to people in other parts of society, not least to many pensioners and disabled people who do not share directly and immediately in the growth in employment incomes either. That is a much broader point and I should be surprised if, at the end of the day, the hon. Gentleman disagreed with it.
I want now to cover as briefly as I can the many improvements contained in the uprating order. In income support we are increasing the premium for families with dependent children from £6·50 to £7·35, which is 50p more than inflation. We are increasing the adult disability premium from £13·70 to £15·40, which is a pound more than inflation. We are increasing the child disability premium from £6·50 to £15·40, which more than doubles it. We are adding more than £100 million to the income support limits for people in residential care and nursing homes, virtually all of which will rise by £10 a week as a result. At the same time, we are increasing the personal


expenses allowance for long-term hospital patients by more than £3, to £11·75 a week. These improvements all come into effect in April.
Then, in October—it is October rather than April only for practical reasons—we shall introduce a new carers' premium into income support, for those receiving invalid care allowance, at a rate of £10 a week. In housing benefit and community charge benefit, all these increases in the income support premiums carry through into the starting points for calculating benefit, thus giving additional help to yet more families with children, disabled people and carers.
In addition, we are making a number of other improvements aimed particularly at assisting those lone parents who are working or who wish to do so. The lone parent premium in those benefits is being increased by nearly 13 per cent. from £8·60 to £9·70 a week, and the amount that lone parents can earn without affecting their entitlement to them is being increased by two thirds from £15 to £25 a week.
In family credit, the adult credit is being increased by £1 a week beyond what inflation would have required to £36·35, which we hope and expect will reinforce our efforts to maximise the effectiveness of that benefit in helping low-income families in work.
In the social fund, we are increasing the maternity payment from £85 to £100, and doubling from £500 to £1,000 the amount of capital that people over 60 may have without affecting their entitlement.
Apart from those improvements in income-related benefits, the order also provides for a number of beneficial changes in other aspects of the benefit system. For those receiving invalid care allowance, it increases the amount that they can earn without affecting their entitlement from £12 to £20 a week. For those receiving invalidity benefit or severe disablement allowance, it increases what they can earn under what is called the therapeutic earnings limit from £28·50 to £35, to improve encouragement for rehabilitation into employment.
Not least—this will be particularly welcomed on the Conservative Benches—the order provides for a significant increase in the help given to the older war widows through the war pensions scheme, with a real increase in age allowances to all over 65, and a particularly large increase, from £15·30 to £20, for those over 80. It also doubles, from £5 to £10, the amount of war widows and other war pensions which is disregarded for the purposes of income-related benefits.
Those increases in the DSS war pension scheme are separate from what my right hon. Friend the Secretary of State for Defence announced on 11 December when he said that he would be making a special £40 a week payment to the pre-1973 war widows. Those extra payments will also come into effect in April and they will be entirely disregarded in calculating income-related benefits.
While concentrating on the changes contained in the order, it is right that I should also remind the House briefly of a number of other changes which are being, or will be, brought about by other mechanisms but which are very much part of the context in which the order is brought before the House.
Last October we abolished the pensioners' earnings rule and made substantial increases in the income support and housing benefit premiums for disabled pensioners and those over 75. We are preparing, and will shortly lay,

regulations to extend attendance allowance to disabled babies under two and to extend mobility allowance to those who are deaf and blind.

Mr. Archy Kirkwood: I hear on the grapevine that there may be some difficulties in the implementation date for the welcome extension of the mobility allowance to the deaf and blind. Is there any suggestion that the improvement will not be made in April as expected?

Mr. Newton: The hon. Gentleman will have seen me hastily consulting my right hon. Friend the Minister for Social Security, but all I can say is that the grapevine on which he heard that does not appear to have extended to Ministers in the DSS. Should it turn out that he is ahead of us in learning of those difficulties, I shall do my best to ensure that they are overcome, but I have not yet had any such difficulties brought to my attention.

Dame Elaine Kellett-Bowman: In the unlikely event of the grapevine being correct, will that extension be backdated?

Mr. Newton: I had better seek further advice to establish the merits or otherwise of the point that has been made before commenting further. I shall go no further than to say that my instinct is that if there proved to be some hiccup in the implementation of a proposal that is among those that are dearest to my heart in all these, I would look carefully at the possibility that my hon. Friend suggests.

Ms. Dawn Primarolo: While the Minister is investigating that hiccup, may I mention another possible hiccup with regard to war widows? A constituent of mine aged 81 in a nursing home will, I am told, have all of the £40 announced by the Secretary of State for Defence clawed back in her nursing home costs. Therefore, it will not be disregarded but will be taken into account in her income support when calculating her contribution to the nursing home costs.

Mr. Newton: It might be sensible if the hon. Lady sent me details of the case.

Mr. Paul Flynn: She is right.

Mr. Newton: The hon. Gentleman might just listen, because the possibilities are not quite as simple as he thinks.
I have made it clear that our intention is to regulate to make sure that total payments are disregarded for the purpose of all income-related benefits. I wish to see the details of the case to which the hon. Lady referred, because it is not unknown, when a home learns that the income of a resident has increased, for it to increase its charge to that person. Clearly that would not be susceptible to action through the social security regulations. It might be susceptible to some form of intervention by my right hon. Friend the Secretary of State for Health or by the local authority. I hope that the hon. Lady and the hon. Member for Newport, West (Mr. Flynn) understand that I need to consider that case. I cannot give an off-the-cuff answer.

Mr. Timothy Raison: We read in the newspapers this morning that Wrens in the Royal Navy are to starting flying combat aircraft. Does the provision cover war widowers as well as war widows?

Mr. Newton: That was a very helpful question, not least because it is primarily one for my right hon. Friend the Secretary of State for Defence. I shall ensure that his attention is drawn to it.
I was referring to the mobility allowance for those who are both deaf and blind when I was subject to something of a barrage of queries and interventions. I was about to say that the Social Security Bill, which is now in Committee, in the able hands of my right hon. Friend the Minister for Social Security and my hon. Friend the Under-Secretary of State, extends attendance allowance to the terminally ill without the six-month waiting period and provides for the addition of invalidity allowance to severe disablement allowances later this year. We are preparing later legislation to introduce the proposed new disability allowance and the disability employment credit.
Last week we referred to the Social Security Advisory Committee draft regulations, all of which we hope to make by April, which make further beneficial changes, many of them fairly small and technical, to income-related benefits. I shall mention just one of them. As announced by my hon. Friend the Under-Secretary of State in a parliamentary answer last week, we intend to double to £10 a week the current disregard for charitable and voluntary payments made to people receiving an income-related benefit, and to disregard completely any regular charitable or voluntary payment intended and used for an item other than certain accommodation costs met by benefit, food, ordinary clothing or footwear and household fuel.
We have been pressed hard by many voluntary and charitable bodies to make that change. It will allow charities, voluntary bodies and relatives to give more help to people, where they wish, without affecting their entitlement to income-related benefits.
It is conventional to end the opening speech in a debate such as this with some reference to money. The money involved is vast. The increase in social security expenditure between 1989–90 and 1990–91, most of it arising from this order, is £3 billion. It takes the total social security expenditure next year to well over £55 billion. As I said in my uprating statement, that is over £1 billion each week. No less important than the amounts involved is what we are doing with it, and the people whom we seek to help.
Taken together, the changes to which I have referred mean that in a comparatively short time we shall have brought about a real improvement in the position of nearly 3 million of the least well-off pensioners, 850,000 disabled people and carers, 1·5 million low-income families with children, including nearly 100,000 lone parents, and about 50,000 war widows. All those people have a particular claim to our concern as a community. We are pleased as a Government to be able to respond to that concern with this wide range of new steps to help, and I have no doubt that the House will be pleased to endorse those that are contained in this order.

Mr. Michael Meacher: Although the Secretary of State treated us to an array of minor changes across a whole range of marginal benefits, this debate on the uprating orders is, in effect, a debate about the overall adequacy or otherwise of the income of the poorest quarter of the population. Although market capitalism is

dominated by the driving forces of money and wealth, the House never debates how that money is distributed throughout the nation.
I have often thought that many of the most important events or processes in our society are never debated when they happen, which is when it really matters, whether they relate to internment in Northern Ireland, competition and credit control in the City, the internationalisation of the capital markets or the accountability of the security services. In the same way, the House never debates the distribution of income and wealth, although it is at the heart of our economic system. I suppose that today's debate is the nearest proxy that we shall get to that, and I intend to treat it in that vein.
My first point, therefore——

Mr. Tim Smith: rose——

Mr. Meacher: It is a little early, so if the hon. Gentleman will allow me to make a few points, I shall gladly give way to him then.

Mr. Smith: I have a helpful suggestion.

Mr. Meacher: Well, I shall take the hon. Gentleman at his word, which may be a bit risky.

Mr. Smith: I simply wanted to suggest that if these are such important subjects for debate, the Opposition might occasionally choose some of them for their Supply days.

Mr. Meacher: A number of those issues arose when the Opposition were the Tory party. However, I was not seeking to make a partisan point—[HON. MEMBERS: "Oh."] Well, I am sorry, I am not seeking to make a party political point but a much—[Laughter.] The hon. Member for Taunton (Mr. Nicholson) should contain himself and try to think a little more reflectively about what I have said. I am simply making the point that many issues in our society are not properly debated in the House. The system of income and wealth, which is absolutely critical in a market system, is rarely debated. This afternoon's debate is an opportunity to take that further, and I shall do so.
My first point, therefore, is that the share of national resources that is allocated to the poor has been declining not increasing, and will further decrease this year as a result of the Secretary of State's uprating of 25 October last year. The right hon. Gentleman likes to say—he says this in every debate and he said it again today—that total social security expenditure is now running at about £1 billion per week, but what he does not say is that the total expenditure has declined from 11·5 per cent. of gross domestic product in 1984–85—the middle of the 1980s—to only 9·7 per cent. now.
Part of the reason for that is, of course, the decline in unemployment, but the major reason is that, as one of their first acts in 1979, the Government deliberately broke the link between benefits and earnings. As a result, the quarter of the population which is long-term dependent on benefits has fallen further and further behind the living standards of the rest of our society. The right hon. Gentleman should be concerned that the Department of Social Security now gets a lesser share of national resources than in 1980, although there are 3 million more people on income support, nearly twice as many people unemployed and nearly 1 million more pensioners.
Clearly, this squeezing of the lowest-income quarter of the population will be taken a great deal further year by year as long as this Government remain in power. That is obvious from the techniques of what I sometimes think of as the Tory demolition contractors, which are now all too apparent, and are manifested, yet again, in the orders.
First, the Government strip out any earnings-related supplement so that only the basic minimum benefit is provided. That was done to unemployment benefit in 1982 and to invalidity benefit a month ago. The savings to the Government have been enormous. Of course, the other side of the coin is the loss to those entitled to benefit. In the case of invalidity benefit, Government savings will rise to a staggering £1·3 billion per year by 2025.
Secondly, the Government break any pension link with earnings so that poor families cannot keep up with rising living standards. Again, the savings to the Government from that device over the past decade have been colossal, as much as £20 billion, enough to fund the entire Government programme of tax cuts since 1979.
Thirdly, they chop universal benefit. That is why child benefit is being frozen for the third year running, leaving it to wither on the vine until the Government have the honesty and decency to admit that their ultimate intention is to do away with it altogether.
Fourthly, the Government start means-testing contributory benefits. That is why the former Chancellor of the Exchequer toyed publicly with the idea of shifting to means-tested pensions. That is why the former Secretary of State for Social Security, the right hon. Gentleman's predecessor, made a stab at abolishing SERPS before he was forced by the public furore to be content with merely vandalising it.
Fifthly, the Government privatise wherever possible. Sickness benefit and maternity benefit have both been handed over to the private sector. Now SERPS is being partially privatised by the encouragement to contract out into personal pensions, with the usual bribe, at public expense, if people satisfy Tory ideology.
With friends like that, the welfare state does not need enemies. It was for those reasons that John Hills, who is widely recognised as a specialist in these matters, in his comprehensive study of taxes and benefits over the past decade, found last year:
Overall, the bottom half of the population has lost £6·6 billion of which £5·6 billion has gone to the top 10 per cent.
That is the reality behind the Secretary of State's smooth reassurances today. We have had 10 years of steady dismantling—an erosion here, a whittling away there, a whole series of minor and inexpensive improvements, which the right hon. Gentleman rattled off again today. Those things are held up to disguise major cuts. There is a constant reshuffling of the pack, but always with the same or fewer cards.
Exactly the same techniques are apparent in the uprating that we are debating. Clearly the Government have broken their promise that the poor would not lose under the poll tax when it is introduced in two months' time. There is a shortfall between the 20 per cent. of the poll tax that everyone, however poor, will be made to pay and the extra income support that is supposed to compensate. Let us take a local authority charging exactly what the Government claim will be the average poll tax—Kingswood in Avon. A couple there on income support

will have to find £39 a year to make up the shortfall out of what is supposed to be the minimum income necessary for basic living expenses.
In the Prime Minister's constituency, in the London borough of Barnet, a similar couple will need to find an extra £55 a year, more than £1 a week. In neighbouring Haringey, a couple on the income support poverty line will be made no less than £151 a year worse off by the poll tax. I have the entire list of local authorities. The figures are large everywhere. Even those losses are likely to be exceeded in the event because they are based on the Government's published poll tax figures, which everyone knows are laughable under-estimates. The true figure could well turn out to be 25 per cent. higher, or more. The real point, however—I cannot emphasise it strongly enough—is that the very poorest people in our society should not have to pay poll tax at all.

Mr. Edward Leigh: Just to confirm the point, does the hon. Gentleman consider that there should be no relation between what someone on income support pays and the expenditure of his local council, and that no pressure whatever should be put on that local council to keep spending down to essential levels?

Mr. Meacher: I certainly do not think that people living on £35, £40 or £45 a week should be made to suffer in any way, whatever their local authority does. We have a ballot box. It is perfectly possible for the people in the borough to vote out a local authority if it acts in a way contrary to their general interest.

Mr. Leigh: rose—

Mr. Meacher: I do not want to get into a general discussion of the poll tax. I just make the point that the hon. Gentleman is very unwise if he believes that the poorest people should be targeted—if I may use a Government word in a slightly different way—in order to punish local authorities. We totally repudiate that view.

Mr. Jeremy Corbyn: I noticed that while my hon. Friend was talking, Conservative Members were muttering, "Haringey?" and asking, "Who runs Haringey?" I am a former member of Haringey borough council. I am not ashamed of it, because I, while I was a member, and subsequent members of the authority did our best to provide a high and satisfactory level of social services, housing development, community development and recreational facilities, for which the borough was penalised by the Tory Government and continue to be penalised by them. It is now vilified for the level of poll tax that will be set for the proportion of expenditure that the authority itself controls. The high poll tax in inner and other London boroughs comes about solely because of the Government's past treatment of inner London local authorities and inner urban areas throughout the country.
Does my hon. Friend agree with me on those points?

Mr. Meacher: My hon. Friend is right: the basic reason for high expenditure in poor areas in inner London is unquestionably, first, the acute level of social need, and secondly, the sharp cuts in rate support grant by the Government, from about 61 per cent. to about 47 per cent. However, I do not wish to enter into a wider discussion of


the poll tax. It is not appropriate now. I simply make the important point that the poorest in our society should not be targeted for penalties under that tax.
Not only are the Government failing to protect poor tenants—although that is certainly true—but they are turning a blind eye to the rip-off that landlords will make out of the poll tax. There is at present no obligation on a landlord to reduce the rent that he charges at the changeover from rates to poll tax, even though that rent includes a rates element that will soon be defunct. I want to quote one case given to me by a citizens advice bureau, which makes the point:
Client is a pensioner living in very poor standard private rented house (outside toilet, only one tap, no bath.) The client has paid a weekly rent which has included rates and water rates. Now had a letter from landlord saying she must pay these separately and had a bill from Yorkshire Water. Landlord has not made any corresponding reduction in the 'rent' she pays.
We have consistently urged the Government to introduce legislation to outlaw that practice, but the Government have refused. They have not even sent a letter, or asked local authorities to send a letter, to all private tenants to warn them that they may be double-charged. That abuse has already netted some £40 million for landlords in Scotland in the past year, and it is expected that landlords in London will pick up a £90 million bonanza in the coming year because of that loophole. Since there are nearly a million private tenants on housing benefit, the total rip-off to landlords at the expense of tenants may turn out to be over £400 million.
It is extraordinary that the Minister of State can be so lax about this malpractice when his own borough of Kensington and Chelsea has the highest percentage of private tenants of any local authority—29 per cent.—rising in south Chelsea, I believe, to 39 per cent., and also the highest number of houses in multiple occupation, where undoubtedly the worst abuses will occur. I beg the right hon. Gentleman to reconsider that issue, as it is crucial that he acts to prevent that abuse from hitting some of the poorest tenants and other poor people in our society.
The Government like to pride themselves on being the party of the family, yet two of their actions—or, perhaps, omissions—in the orders strike at the heart of the family. The Government have not protected the poorest against the poll tax—as I have said—and, by freezing child benefit for the third year running, they have refused to find even an extra 50p for the family budget. That is not just mean but plainly dishonourable.
In its 1987 manifesto, the Tory party promised:
Child benefit will continue to be paid as now, and direct to the mother.
Four months later, the Government froze it, and it has remained frozen ever since despite the pantomime of a yearly review. The Government have now cut the real value of child benefit by a fifth. The Secretary of State now has the distinction of reducing total family benefits for the average family to the lowest level in the EEC, except for Ireland, Greece, Spain and Portugal. In Britain, weekly family benefits for a couple with three children under 12 are £21·75, whereas in France they are £43·30—almost exactly twice as high.
After listening to what the right hon. Gentleman said today, I must say that one of the more pitiful sights on

these occasions is to watch him being forced to dismiss child benefit and to expound on the merits of family credit or diverting to other needy groups, when he knows perfectly well that other needy groups—which I shall come to in a moment—have not had the uncovenanted increase that he pretends.
The right hon. Gentleman knows as well as anyone that family credit is riddled with defects. Child benefit has a virtual 100 per cent. take-up, whereas family credit achieves only 50 per cent. The Government formerly talked of targeting—now the word focusing is all the rage—but that focused benefit reaches only half of those for whom it is intended. Child benefit is cheap and easy to administer, but family credit is much more expensive and difficult. The last round of advertising recruited claimants to family credit at a cost of about £120 for every additional applicant.
As my hon. Friend the Member for Leeds, West (Mr. Battle) said in an intervention, child benefit does not contribute to the poverty trap, whereas family credit does, despite the Secretary of State's lengthy answer—and as do all means-tested benefits. I do not know whether it makes the right hon. Gentleman squirm to be forced by the Prime Minister to argue for things that he does not believe in, but it makes me squirm to have to listen to him being so dishonest.

Mr. Robert G. Hughes: The hon. Gentleman sought to make a comparison between this country and our European neighbours. Does he agree that the picture that he painted looks less convincing when one adds what he forgot to mention—that no other European country has anything like family credit?

Mr. Meacher: Family credit goes to about 340,000 people. There are 12 million children in this country and there are similar totals in receipt of the equivalent of child benefit in those other countries. Family credit is a drop in the ocean. If the hon. Gentleman believes that that makes any difference to the overall question of the amount of money that societies in different parts of Europe are prepared to give to all families, he should reconsider.

Mr. David Nicholson: Will the hon. Gentleman take into account the fact, that, in Germany, Italy and Greece, child benefit arrangements are means-tested and that other countries do not have the same universal arrangement as ours? Does the Labour party plan to means-test child benefit?

Mr. Meacher: No, we certainly do not, because it is unwise and we do not accept it. The levels of the means-tested benefits that the hon. Gentleman mentions are substantially higher than those in this country, so I suspect that the average family in those countries still gets considerably more than the average family in this country.
We also strongly object to the downgrading of statutory sick pay. I use the term "downgrading" deliberately. This further chipping away at an already eroded benefit is typical of the Government's emasculation of the benefit structure. As the Secretary of State fully explained, employees now get the full statutory sick pay rate as long as their earnings are over £84 per week. From April they will get it only if their earnings are over £125 a week.
To sugar the pill for the low-paid—that is the most euphemistic phrase that I can think of—the lower rate of


sick pay is to be increased by a magnificent 25p a week more than is needed to compensate for inflation. The Secretary of State made enormous play of that, but I suspect—I do not want to be patronising—that he would hardly stoop in the street to pick up such a paltry sum.
This act of unstinting and abundant magnanimity has to be balanced by more than equivalent cuts elsewhere in the sick pay uprating. Hence, the higher rate is being cut to the tune of £3·55 a week less than the amount that is needed to compensate for inflation. The right hon. Gentleman did not make that clear. The handling of the net effect of all those manoeuvres is characteristic of the Government. The Secretary of State parades the extra 25p as if it were generosity beyond the dreams of avarice, but the Government are clawing back £70 million to £80 million per year out of the whole shabby contrivance.
The Government's excuse for the change is that, since statutory sick pay started in 1983, the earnings threshold for the higher rate has been raised only in line with prices and not with earnings, so a much bigger rise in the threshold is now justified. That is fine. That means that the Government are at last coming round to the belated recognition that the logical basis for uprating earnings-replacement benefits is an index of average earnings rather than prices. The trouble is that under this Government, logic is partisan, selective and always rather self-interested.
The Government are using the earnings link to raise the threshold in order to disqualify hundreds of thousands of workers from the higher rate of statutory sick pay. However, when it comes to the earnings link for the uprating of pensions so that millions of pensioners will qualify for higher pensions, the Government do not want to know. Logic is fine for the Government as long as it leads to cuts.

Mr. Tim Smith: Let us be quite clear about Labour policy. Can the hon. Gentleman confirm that the logic of his argument would be to increase the starting point for the payment of national insurance contributions by the increase in earnings, thus increasing it at a faster rate than over the past 10 years? That would disqualify more low-paid people from benefit.

Mr. Meacher: Not at all. It is right that in general we should link contributions and benefits to earnings as far as it is possible to do so. We have certainly made a fundamental commitment, of which the hon. Gentleman is well aware. We believe that pensioners ought to maintain their share of rising living standards. National insurance contributions, which are a percentage of incomes, are based on buoyant income. That is why there is such a large surplus in the national insurance fund. We support that general principle as a means of ensuring that people in need maintain their share of the community's rising living standards.
When we take the fiddle on statutory sick pay into account, it becomes possible to net out the whole balance of expenditure over this benefit uprating. The Government are currently increasing expenditure on disability and carers' benefits by £100 million. They are helping low-income families with the five new measures that the Secretary of State announced in the uprating statement, which was repeated today, and that will cost £70 million. They are providing a small number of concessions for pensioners, which will cost £15 million. The total is £185 million.
I readily acknowledge that the Government are also spending £100 million on raising income support levels for people in residential care and nursing homes. The Secretary of State slipped over the point that that does riot anywhere near match the rise in inflation and could thus be construed as a cut in real terms. It still leaves a problematic gap between benefits and charges of up to £50 a week, and it is usually treated separately from the benefits uprating. For that reason, I do not include it here, and I think that that is right.
On the debit side, the Government are saving £250 million on child benefit and, as I have said, a further £70 million to £80 million on statutory sick pay. That gives total savings of about £325 million. Despite all the paraphernalia of minuscule extras with which the right hon. Gentleman sought to adorn his uprating statement and with which he regaled us, the stark truth behind the orders is that, overall, the Government are not giving the poorest quarter of the population any extra money at all. They are relieving a very large part of the population of about £140 million. We all know the old adage:
I fear the Greeks even when they bring gifts.
That takes on a new meaning under the Government. When the Government or the Secretary of State give us something, we would be well advised to count our fingers afterwards.

Mr. Newton: In the course of the past few minutes, the hon. Gentleman appears to have slipped into a proposition based on the assumption that all recipients of child benefit are among the poorest people in the population. If he does not think that, he could not justify his last sentence. However, we know that a surprisingly large part of any payment of child benefit goes to those with earnings of over £20,000 a year. Secondly, he has totally ignored the major increases in benefits for older and more disabled pensioners, which were made last October, and he has ignored the abolition of the earnings rule, both of which lead to significantly greater expenditure in the forthcoming year than in the present year. The cost is £600 million in a full year, and it was £300 million last year. Another £300 million has to be found this year. To be fair, the hon. Gentleman should take that into account in his presentation of these matters.

Mr. Meacher: I shall deal shortly with disability benefits and the earnings rule. I certainly acknowledge the right hon. Gentleman's point, but I made the same point to him, that I suspect that the great majority of the benefit does not go to the lowest quarter of the population that we are considering.
The cuts and the dismantling of the social security underpinning of our society do not stop here. I pay the right hon. Gentleman the compliment of saying that he is something of a master magician. He specialises in two tricks, one of which is the constant recycling of old money and endless exercises in the redistribution of poverty so that one group's gain is another's loss. However, it is called the provision of new money. The other trick is to flash a whole array of cards announcing trivial increases in marginal benefits before the bemused eyes of his onlookers while keeping the joker firmly tucked up his sleeve. The right hon. Gentleman did that today. In this case, the joker in the pack is the Government's sudden and unilateral abolition of the additional pension to invalidity benefit.
In his statement on disability benefit—for which, I might say, disabled people have waited 10 years—the right


hon. Gentleman took us all round the houses about how he was going to do this, that and all the other to improve the lot of the disabled. But about the abolition of the earnings-related pension he kept very mum indeed. We can now see exactly why. He bragged about how he was increasing expenditure on disability benefit by £300 million a year by 1993, but he did not tell us that the figure would then fall steadily to nil by the year 2000 and would continue to fall steeply over the following 25 years. So, overall, the Government are making a colossal saving at the expense of disabled people.
The answer that the Minister of State gave me a fortnight ago—in Hansard of 26 January—shows clearly that over the first quarter of the next century the Government will rake off a staggering £9 billion by way of reductions in disability benefits. The disabled people's organisations have certainly made clear their intense disappointment with the Government's review, but even they had not anticipated that what was called a review could turn into ransacking and plunder on such a scale.
The last issue that I want to raise concerns pensioners. I want to repeat the central point about this uprating order: if the Government had not peremptorily ended Labour's link with earnings, a single pensioner, in two months' time, would be getting a pension of exactly £60 a week. As it is, he or she will get only £46·90—£13·10 less per week than Labour provided for. Similarly, a married couple would be getting a basic pension of no less than £95·80, whereas they will actually get £75·10—a full £20·70 less. I accept, of course, that there is in Britain one person over 60 who thinks that pensioners are getting a very good deal, but, of course, the Prime Minister does not actually have to live on the old-age pension.
It is not as if the Government did not have the funds to give more help to pensioners if they wanted to do so. Last April, the cumulative total in the national insurance fund was touching £10 billion. In 1988–89 alone, it grew by £2·25 billion. Yet, instead of paying higher pensions—which are desperately needed, as more than half of all pensioners live on, or only very slightly above, the poverty line—the Government are currently trying to reduce the surplus by giving money back to people in work. Indeed, the cost to the national insurance fund of the 2 per cent. bribe to personal pension schemes is already £1·5 billion over budget. If the Government had so chosen, that sum could have been used, instead, to double the pension increase that we are debating under the order.

Sir George Young: I am sure that the hon. Gentleman does not wish to mislead pensioners, who may be following the debate. In the first year of any Labour Administration, would the link be restored?

Mr. Meacher: Indeed. I am very glad that the hon. Gentleman understands what we have been saying repeatedly. I am very glad that he is now tuned in. We have said that we shall restore the link. There is no question of retrospective payments. [HON. MEMBERS: "Ah."] Of course there is no question of retrospective payments. There can be no question of retrospective payments. However, we have said that we would restore the link with earnings, so that, over a 10-year period, pensioners would get an extra amount of the magnitude about which I have been talking.

Sir George Young: Will the hon. Gentleman give way?

Mr. Meacher: No, not again.
The Government say that they believe in targeting, but it is now becoming all too clear that what they mean is targeting their friends in the City for bonuses for privatised schemes, at the expense of pensioners, who are being given the meanest possible increase that the Government can get away with.
I began my speech by saying that the debate was about the share of national resources allotted to the poorest quarter of the population. I think that it will be widely accepted that in this country there is a majority view that the divide between rich and poor is now too wide and should be reduced. It is because the Government have repeatedly and deliberately widened that divide, and have no intention whatever of closing it, that we shall vote against the orders.

Mr. Timothy Raison: At the beginning of his speech, the hon. Member for Oldham, West (Mr. Meacher) made one point on which I should like to comment. He said that the House is not really very good at discussing strategic issues. Some of his examples were a bit far-fetched, but I think that we suffer from the fact that we do not discuss taxation and public expenditure together anything like as much as we should. That has particular relevance and force in the context of the subject about which the House will not be surprised to hear I intend to speak—child benefit. The history of child benefit is that it is a replacement both for a social security benefit and for a tax allowance. I shall come back to that.
In his opening speech, my right hon. Friend made a number of points with which I am entirely happy. The uprating that he is introducing is useful in many respects. He is a Secretary of State for Social Security who cares deeply about what he is doing, and he is held in very high regard by the House. Having said that, however, I must say that I think he is wrong in respect of child benefit. Every year, in the public expenditure plans, we make provision for an uprating of child benefit in the following year. Every year, the Secretary of State is required to review the level of child benefit. Every year for the last three years, this review has taken place, and every year for the last three years the result has been no uprating. I am bound to say that, with each year, our election pledge to continue to pay child benefit as at present sounds a little more hollow. It is time that we changed this policy.
We have debated child benefit so often in the last few years that I do not intend to run through all the arguments—I will simply itemise them. There is the fact of the poor take-up of family credit, as against child benefit; there is the fact that child benefit does not lead to the poverty trap in the way that selective benefits do; there is the fact that it goes directly to the mother; there is the simplicity and certainty of child benefit, as opposed to the complexity and uncertainty of means-tested benefits; there is the history of child benefit; there is the long tradition of help in this country for all those who bring up the children; and, as I have said already, there is the fact that when it was brought in, it was intended very clearly as a replacement not only for a benefit but for a tax allowance.
All this is familiar, but it is very important. Of course, as always, we come back to the argument: why provide a universal benefit and not be selective? This rings false when we look at tax allowances, which are the other half of the


equation. After all, we provide tax relief on mortgages—the main effect of which is probably to push up the price of houses—for everybody, regardless of income. We provide tax relief on pensions contributions for everybody, regardless of income. We have now actually brought in a benefit by which we provide tax relief on private health insurance for people over 60, regardless of income.
In all these cases, it may even be argued that the richer one is, the greater the benefit in tax allowances. I do not think that it is possible to continue to argue that there is something wrong with the unselective nature of child benefit while at the same time continuing to accept, and even to introduce, a new tax allowance that provides specific help for those with private health insurance. I do not think that that is sustainable.
I have some sympathy with the view that some of these tax allowances should be cut. However, that is not the Government's position. The Government have brought in a new allowance, yet they say, at least by implication, that we have to think in terms of pruning child benefit in real terms. I do not think that that is on. The one certainty is that bringing up children involves additional cost. That has always been recognised in this country. I realise, of course, that child benefit goes to some people who certainly do not need it, but its advantages are so great that that is a price worth paying.
What about this year's review? After all, the Secretary of State is required, each year, to look at the special circumstances of the year ahead. Let me again say that the money for an uprating was allocated in the public expenditure round for this year, so there is no question of an additional call on public resources. There are special reasons why there should be an uprating this year. I believe that it should he automatic, but in the present situation we have to look at the special circumstances—the relevant considerations—as the Act requires.
Some of this is political but some of it, much more importantly, is a matter of basic concern for our fellow citizens. The first special reason for an uprating is that it would offset the impact of the community charge, particularly on those people who are just above the rebate level. These are the people in my constituency who have been paying rates of £300 to £400 but who, as a couple, will face a community charge of £700 to £800 a year. There is transitional relief but that will be of no more than limited help in these cases. Many people will be affected, and they are beginning to come to our surgeries and to write us letters because of their special circumstances.
The House will recall, how, in 1988, we had to face up to the consequences of the Social Security Act 1986 and its effect on housing benefit. Hon. Members will recall the flood of letters that we received then and the flood of people who came to our surgeries saying, in particular, that the capital limit for housing benefit introduced in that Act was causing considerable problems. I should like my right hon. Friend the Minister for Social Security to let us know what will happen to transitional payments on housing benefit from April 1990. As well as that, we can recall the fact that, under pressure, the Government had to give way and, quite rightly, make concessions.
I believe that the Government will be faced with a much greater storm as a consequence of the community charge than they experienced as a consequence of that Act. The Government will have to make concessions. The simplest way to do that would be to recognise that the people who will have most difficulty as a result of the community

charge, in the categories which I have mentioned, will be those who have to pay the cost of bringing up children. If we can do something to meet that cost by, even at this late stage, uprating child benefit, we would have a useful measure and something that would be entirely inside the terms of the Act.
The Government are clearly worried about wage pressure. My right hon. Friend the Chancellor of the Exchequer and others are making clear their concern about this. An increase in child benefit would do something—not everything: I am not trying to exaggerate —to help to head off the problem of wage pressure.
Furthermore, there is a growing campaign for tax relief on child care costs. I do not agree that there should be such tax relief, because I think that it would be unfair if the women who go out to work derived benefit not only from the income from that work but from tax relief, while mothers who stay at home to look after their children get nothing at all. That would be unfair. The simple answer to this is to approach it in a different way—by an increase in child benefit, which goes equally to the mother who goes out to work and to the mother who stays at home to look after her children. That would be neutral, which is as it should be.

Mr. Corbyn: Is there not the serious problem of a shortage of pre-school child care places? As a result, many private nurseries charge exorbitant fees, which people are forced to pay because there is no other way to have their children looked after. They naturally look to tax relief to offset that cost whereas a better solution would be larger and better statutory state provision of pre-school facilities for small children, who benefit from it in. many ways.

Mr. Raison: That is a whole new topic. As it happens, I was Chairman of the Select Committee on Education, Science and Arts when it produced a report advocating a substantial expansion of nursery education, so I agree with the hon. Gentleman, but I do not want to go down that path.
I have given the reasons why I believe that child benefit should go up. It is true that the additional child benefits resulting from one year's uprating would not offset all the needs about which I have spoken. However, it would more do so if we had uprated child benefit every year, and it would more do so now if we were to uprate child benefit in a way that includes an element for catching up on our failure to uprate it in the past.
Increasingly, I believe that we could go much further, again if we are willing to look at the tax and benefits systems together. As the House knows, the taxation of husband and wife is about to be separated—on the whole, an admirable measure. There is to be a married couple's allowance and a similar allowance for unmarried couples who have children. I thought it would be interesting to ask what the cost to the Exchequer of these allowances will be.
My right hon. Friend the Chancellor of the Exchequer replied:
The direct revenue cost of the married couple's allowance in a full year at 1990–91 levels of income is estimated to be £5 billion. If the allowance were to be given only to married couples where either the husband or wife was a 65 or over, there would be a saving of about £4·5 billion."—[Official Report, 20 December 1989; Vol. 164, c. 241.]
In other words, the married couple's allowance is absorbing just about the amount of money that it costs to provide child benefit in any one year. We should seriously


consider the possibility of scrapping these allowances and doubling child benefit. That could be done without any net cost to the Exchequer.
It so happens that I am a strong believer in conventional, traditional, orthodox marriage, and in itself I like the idea of the married couple's allowance. On the other hand, if I look at the real problems in society, I find it impossible to deny that those who have children clearly have costs that do not arise simply from the fact of being married. Therefore, I put it seriously to my right hon. Friend the Secretary of State, as I would, if he were here, to my right hon. Friend the Chancellor of the Exchequer, that they should look at the different ways in which we are providing help to families. They should take this opportunity to see whether, by scrapping the married couple's allowances, we could double child benefit, which would have enormous advantages. Nobody can say anything about targeting, because the married couple's allowance, like all the other tax allowances, is non-targeted.

Mr. Christopher Hawkins: I agree with everything that my right hon. Friend has said, except his last point. The danger of getting rid of a tax allowance and turning it into child benefit is that the Government would continue to freeze it. The irony of the present problem is that, if child benefit had remained a tax allowance, we would have increased it by more than the rate of inflation and said what a good thing that was because it was part of our overall strategy of reducing taxation. However, because we converted a tax allowance into a benefit, it is a bad thing to increase it in line with inflation.

Mr. Raison: My hon. Friend has a strong point. The answer is that the arrangement about which I am talking would have to be statutorily compulsory, and the trouble about child benefit, as we know, is that it has been optional. We would have to have a firm guarantee, by some means or another—perhaps something like the Rooker-Wise amendment—that this would be an automatic process, and that would meet my hon. Friend's point.
By this approach, we could have a real means to help those with children. Many of our other anxieties would disappear. I have already mentioned child care, but in this way we could also provide help for single parents without having an allowance that is seen by some as an incentive to become single parents. Many other advantages would flow from this, and nobody could argue that we were abandoning a system of targeted benefits in favour of untargeted benefits.
I appreciate that such a change would have substantial consequences, and I do not expect the Minister, when replying, to say that the Government accept all that I have said. But they should at least take note of the fundamental changes that I have outlined. While many complications may be involved, we must get away from the annual refusal to uprate child benefit. It does the children and our party no good. I hope that my right hon. Friend has enough wisdom and understanding to appreciate that the policy we are pursuing is wrong, and that he will make sure that we change it.

Mr. Archy Kirkwood: It is a pleasure to speak following the right hon. Member for Aylesbury (Mr. Raison) who made a powerful and impassioned speech, the majority of which I supported wholeheartedly. He has a notable record as a champion of child benefit and did that cause much justice in the way that he deployed his case.
Today, I think for the first time, the Secretary of State came up with what could be described as a relevant consideration. I have complained to his predecessors that child benefit has been frozen willy-nilly and without the semblance of an argument to justify that course. I was confused by the right hon. Gentleman's argument today: although I recognised the sense of his case generally, he seemed to suggest that, because average earnings have been increasing and money is therefore available to the average family with children, that is a relevant reason for freezing child benefit this year.
I suspect that there will be few years in the near-to-middle future when that will not be the case. In other words, if it is a relevant consideration now, and if it applies next year, child benefit will remain frozen for years to come. If so, the right hon. Gentleman should say so. It would be more honest of the Government to admit that, rather than continue with annual charades and uprating statements seeking to defend the freezing of child benefit. I endorse everything that the right hon. Member for Aylesbury said about that, and I will not rehearse again the important positive arguments that he adduced in favour of child benefit.
I wish to deal principally with the effects that the uprating will have on the elderly. Last March, there was an uprating of 5·9 per cent. The year-on-year inflation increase was 7·6 per cent. last September, and that is the figure that we are now discussing for basic increases in the state pension. Considering the monthly inflation increases that have occurred since April of last year—some monthly increases have reached 8·3 per cent.—and looking ahead, not even a 7·6 per cent. increase will measure up to the real increases in inflation that basic state pensioners will have to face after April. That is why it is inevitable, for at least another 12 months, that pensioners who rely for their income on the state pension will see their standard of living eroding.
The right hon. Gentleman cannot, in all conscience, allow that to happen year after year. There is a respectable argument for considering going back to the link with earnings. I would not go as far as the hon. Member for Oldham, West (Mr. Meacher) in that respect. The inexorable erosion of the standard of living of pensioners cannot be countenanced by the Government, who will have to do what they were forced to do last October, and I welcomed the one-off payment which they gave and which did not affect transitional relief. That was a payment of £2·50 or £3·50 to certain retired people who were in particularly straitened financial circumstances.
The Government will have to take that action with monotonous regularity unless they recognise the ongoing real needs of pensioners. The Social Security Advisory Committee pointed out to the Government years ago that they would occasionally—not every year—have to redress the balance between earnings and price increases if they were to be anything like fair to pensioners who struggled for their day-to-day existence on the basic state pension.
The increases to which the Secretary of State refers regularly in respect of pensioners with occupational pensions are welcome, and in the next century there will not be a problem if things go according to plan. That, too, is to be welcomed. But nearly 60 per cent. of present-day pensioners rely for more than 75 per cent. of their income on state benefit. The right hon. Gentleman cannot ignore that, or he will be ignoring generations of pensioners, between now and 10 or 20 years hence, who will suffer terribly unless the Government do something for them.
I am disappointed that the Government have not found a way to extend mobility allowance beyond retirement age. The age cut-off point is now 66. If the Government feel that it would be too expensive to do that immediately, they should accept that in cases where the payment of mobility allowance to people over retirement age would prevent them from having to be institutionalised—a precedent exists for taking such action with social fund community care grants—limited change could be made as a first step. All sorts of improvements could be made, but we should be opposed to having age discrimination built subliminally into the benefits system.
Some of the changes that the Secretary of State announced are imaginative, but there is force in the argument that he has been engaging in some sleight of hand by moving the money around, rather than trying to argue the case for more funds from the Treasury. I am not privy to the inside negotiations that he conducts with the Treasury, but a strong case exists for improving matters for the elderly and needy. and I hope that he is arguing strongly on their behalf privately, if he is not doing so publicly.

Mr. Matthew Taylor: My hon. Friend makes an important point about the mobility allowance. In rural areas such as Cornwall, pensioners who are capable of looking after themselves and living alone, but who are unable to do so because they are not mobile, are isolated without such an allowance. They find the cut-off point hard to understand, and I cannot justify it to them when they come to my surgery.

Mr. Kirkwood: My hon. Friend makes a helpful intervention. He and I, along with many Conservative Members, represent rural constituencies and are well aware of the problem.
We must take note of the increased fees that are having to be paid for residential accommodation for the elderly. I welcome, as far as it goes, the £100 million improvement that has been made, but I fear that difficulty will arise. I also appreciate that it is not the normal category of expenditure that we consider when uprating statements are made.
It appears that the Government have changed their policy of positive discrimination in favour of the behaviourally disturbed elderly patients in residential homes as opposed to the simply frail elderly. In the last four or five years, the increased payments made in the dementia category—the really severely behaviourally disturbed elderly—have suffered and the positive discrimination that such cases enjoyed in 1986 has been eroded to the point where the payments available after April from the DHSS to meet fees will be equal as between the frail elderly and the behaviourally disturbed elderly.
I have been conducting a lengthy and worrying correspondence with a constituent of mine who runs a

good bona fide residential home for elderly demented people. That constituent is having great difficulty in trying to make ends meet and provide the level of service that he is anxious to maintain and would maintain if he could get a sensible level of support from the Department. Over the past four or five years, far from enjoying the £50 increase to which the Department said that he was entitled, he received only a £20 increase in weekly fees. Meanwhile, he has incurred extra employment costs because of Whitley Council increases and the need to employ the more highly qualified staff required for psychiatric patients. The Department should consider carefully that category of fees and the limits for that category of patient.
The community charge has been in operation in Scotland for almost one year. The hon. Member for Oldham, West (Mr. Meacher) made the point that the Government will be obliged sooner or later to reconsider the support given to claimants liable to community charge when it is introduced in England and Wales in April. The one-off compensation payment of £1·15 in income support rates for 1989–90 is significantly less than the amount for which many claimants paying above-average levels of poll tax will be liable after April. When that compensation was first given, an income support clawback of 50p was made that has never been made good.
It should be possible to identify a separate amount to compensate claimants for poll tax contributions, which should be increased by the average rise in poll tax each year. One hundred per cent. rebates should be given to all income support claimants liable to poll tax. If the Government set their face against that, there is an unanswerable case for increasing the 20 per cent. contribution element by the average annual increase in poll tax payments.
As I read the figures, the social fund has effectively been frozen, for the third year in succession, at £205 million—which shows a degree of bad faith on the part of the Government. The social fund was bruited as an experiment that would be progressive, flexible, and capable of overcoming the anomalies introduced by the 1988 changes, which were themselves the consequence of the Social Security Act 1986. To leave the sum at the level proposed for next year would be a huge mistake and a great shame. Figures for December 1989 show that 56 per cent. of people requesting community charge grants and 40 per cent. of claimants for budget and loan facilities from the social fund were refused. There is a vast potential for the social fund to meet, but its effective freezing for the third successive year is a retrograde step.
The £20 million saving made in the 1988–89 Budget should be made good in 1990–91 and community care grants uprated regularly in line with inflation. For a variety of reasons, the proposed increases in pensions and benefits do not deserve support. They fail to meet the needs of the current generation of retired people who rely on the basic state pension as their principal source of income. Nor will they provide assistance to those struggling to cope with a 20 per cent. contribution to their poll tax or families relying on child benefit to make ends meet. Such improvements as have been made will be at the expense of other claimant groups. For those reasons, I urge the House to reject the orders.

Mr. David Nicholson: The answer that the hon. Member for Oldham, West (Mr. Meacher) might have given to the question asked by my hon. Friend the Member for Beaconsfield (Mr. Smith) was that the Opposition have not proposed debates about the distribution of income and wealth on their Supply days because those responsible for purging and purifying the Labour party would not like that or allow it to be done.
I welcome the largely constructive approach taken by the hon. Member for Roxburgh and Berwickshire (Mr. KirkWood), although I regret his call to right hon. and hon. Members to vote against the orders. I hope that my right hon. Friends the Secretary of State and the Minister for Social Security will consider the hon. Gentleman's remarks about mobility allowance and the fees paid to nursing homes.
I welcome the positive way in which the hon. Gentleman responded to the interesting speech of my right hon. Friend the Member for Aylesbury (Mr. Raison). From it, there does appear to be new thinking in the House, and, I am told, outside it, in the child benefit lobby. Although I have not until now been sympathetic to many of that lobby's arguments, my right hon. Friend the Member for Aylesbury addressed himself to new circumstances imposed by the community charge and other factors, and I hope that his proposal will be carefully considered.
A critical letter that I received from one of my constituents complains that the Government are adopting a social policy of "Victorian laissez-faire". I question how that can be squared with an increase in social security expenditure of 36 per cent. in real terms since 1979, with more than £1 billion per week in social security benefits in the coming year, and with total expenditure on cash benefits for the long-term sick and disabled doubling in real terms what it was in the last year of the previous Labour Government. Those are extraordinary achievements purely in resource terms, and do not justify the criticism of Opposition Members. I also praise, as I have before in private, my right hon. Friend the Secretary of State for the considerable skill that he has shown in the few months that he has held his present office, in using those resources in an imaginative and intelligent way.
When I intervened in the speech of the hon. Member for Oldham, West in respect of European comparisons, he made the point in response that levels of child support in the countries I mentioned were very much higher than in this country. I wonder, for example, whether that is true of Greece. In France, Germany and the Irish Republic, there is no guarantee of annual uprating of child benefit, and in Italy and Portugal, eligibility is linked to insurance status. France does not pay benefit for the first child. Opposition Members should be careful before arguing that this country is behind in the European family.

Mr. Battle: I invite the hon. Gentleman to spell out France's policy on child benefit. Does he not agree that it introduced family support because of its declining population? France's benefits are well ahead of those of this country, and have been for many years.

Mr. Nicholson: I hear what the hon. Gentleman says, and I hope that we can explore that point in future debates.
I have welcomed before, and welcome again, my right hon. Friend's imaginative proposals for giving more support to those who care for the disabled, which will benefit 30,000 carers. That is a positive improvement.
The deal for pensioners has always dominated social security debates, and is important to my constituents and to those of many other right hon. and hon. Members. There is a considerable difference in philosophy between the Government and the Labour party, which says, "Let's promise to raise the universal pension by a very large amount, by keeping it in line with earnings." When Labour was in government before, we discovered that that could not be done all the time, and that this effort had a horrifying effect on our economy in terms of spending, taxation and borrowing. The present Government guarantee a minimum, which my right hon. Friend the Secretary of State has managed to improve this past year with the benefits paid to poorer pensioners. Above that minimum, pensioners are now benefiting from their own savings and enterprise in their working lives.
Pensioners' total net income, which is something that we must always consider rather than simply the value of pensions, grew by 23 per cent. above inflation between 1979 and 1986. That is as much every year as in all the five years of the last Labour Government. Between 1979 and 1986, pensioners' incomes grew twice as fast as those of the population as a whole, and that is an important factor.
We must bear in mind the fact that in 1979 only 60 per cent. of pensioners had savings incomes. In 1986, the figure was 70 per cent., and among recently retired pensioners in 1986 the figure was 85 per cent., so it is increasing all the time. According to the latest figures, 50 per cent. of all pensioners and 70 per cent. of recently retired pensioners have occupational pension which helps them to cope.
Approximately half of all pensioners own their own homes—44 per cent. own them outright and 4 per cent. own them with a mortgage. Let us consider how the capital value of those homes has increased all over the country, but particularly in the south. It is another matter for debate, because the price increases have caused considerable difficulty in those areas, but we need to consider more imaginatively how income-poor retired people can draw upon the considerable capital values locked up in their homes. My hon. Friend the Member for Bournemouth, West (Mr. Butterfill) tried to carry an amendment two years ago, and I hope that more can be done in that issue.
I move on to comparisons with pensions in Europe. There has been a lot of propaganda on this subject. We have all received in our mail allegations that British pensioners are the poorest in Europe. However, there are significant variations between pension arrangements in European countries. For example, in France the pension is half the average earnings in theory, but in practice only one third of French pensioners receive a minimum pension which is designed as a safety net. Only the United Kingdom provides a separate pension for a wife who has not worked.
The comparisons that have been made by the Opposition omit to mention the role played by occupational pension schemes, which are rare in the rest of Europe. Also, in several European countries pensioners are charged for the use of health and social services, but in Britain those services are free of right to every pensioner.
Mrs. Dorothy Rhodes is president of Pensioners' Voice, which has lobbied strongly on the subject, and she concedes:
I have been one who has spoken loudly in support of parity with Europe, but during the past year I have been to Pensioners Congresses in Italy and Greece and, having spoken at length to those who actually receive the Euro pensions…discover that in many cases the actual cash received in relation to the cost of living is often lower than that in the United Kingdom. I am revising my opinion; for in no way can our Federation ask for an equality that would disadvantage our own people.
That is an important concession and we should remember it when we pursue the argument about comparisons with Europe.
Every hon. Member who has spoken in the debate has mentioned that we are on the threshold of the new community charge regime. The hon. Member for Oldham, West mentioned double charging by private landlords. There are not many private landlords in my constituency—I wish that there were more, because it would help with the housing situation. I hope that my right hon. Friend the Minister will respond to that remark and give his attention to it, because it is a problem and an abuse and it is used as a criticism of our arrangements for the community charge.
The hon. Member for Oldham, West also alleged a failure to increase family support to meet the community charge level in local authorities which were keeping to the Government's spending guidelines. I am not arguing that income support should increase to a level such as that in Haringey or Islington. I am sorry to see that the hon. Member for Islington, North (Mr. Corbyn) is no longer in his place, because he intervened on this subject. I do not think that anyone would argue that, because all voters, including pensioners, must recognise that they have to pay for Labour extravagance in those areas. [Interruption.]
I am making a point that I think Opposition Members will recognise is fair, because the hon. Member for Oldham, West mentioned Kingswood, which is near my constituency, and I hope that my right hon. Friend the Minister will respond to that because it is an important point.
On the subject of the community charge, I shall quote what I wrote in my local newspaper recently. It is no bad thing for hon. Members to say to the Government and to the Opposition in this House what they are saying to their constituents outside it. I said:
My constituents (and I) have a right to be angry—but with the Department of the Environment, not the County Council at the huge discrepancy between the final figure, whatever it is, and all the figures previously forecast.
We think that the figure for the community charge in my area is going to be near £350. The reason I mention this is that the elderly and families on low incomes are told all the time to plan ahead and to budget. They do plan ahead. They listen with care to the figures that my hon. Friends and I have given them as to what we thought the community charge would be. We were guided by the figures that the Department of the Environment issued year after year.

Mr. Leigh: That was rash.

Mr. Nicholson: My hon. Friend says that that was a rash thing to do, and perhaps I should take his advice and not believe the Government's statistics, but I think we would be in bad trouble if we had to believe the statistics that the hon. Member for Oldham, West uses all the time.
On 17 November 1987, the estimate for the community charge in my constituency, based on 1987–88 spending, was £187. On 23 June 1988, my right hon. Friend the Minister for Agriculture, Fisheries and Food, as he now is, estimated that the figure, again based on current spending for 1988–89—I am not talking about Government targets or assessments—was £212. Finally, on 19 July 1989, my right hon. Friend the Secretary of State for Trade and Industry, as he now is, produced a table which again illustrated the impact of the community charge, if it had been implemented last year, giving a figure of £253. I fear that those figures are way below the amount that we are going to have to pay, and I think that that chiefly reflects an unsatisfactory grant settlement.
Over the coming months, I shall make efforts—and I think that many of my hon. Friends will join me—to help my elderly constituents and families on low incomes with the community charge in two ways. First, we shall carefully examine local government spending, make comparisons with other local authorities, see where local authorities managed to come up with a charge which is lower, what they have done and what efficiencies they have introduced. I think that we will benefit from the work of the Audit Commission because it has a powerful role in these matters. And we shall try to get the total spending by local authorities down wherever we can. I am sure that Labour-controlled local authorities have a major role to play in that.
Secondly, we shall try to obtain a better grant from central Government by next year—I do not think there is much to be done for this year. I think that is particularly valid for Conservative-controlled local authorities, so that we can move closer to the figures that the Department forecast for the charge.
I make no apology for raising this subject during a debate on social security because the beneficiaries of social security—the elderly on limited incomes and poorer families—are very concerned about it, and I am sure that that will be reflected in my surgery and in my mail box during the next few weeks.
On this side, we all praise Ministers in the Department of Social Security for what they have done to obtain and use resources. They should look to one or two Ministers in other Government Departments for co-operation in dealing with these problems. But we certainly want more sense and reason from Labour-controlled local authorities in meeting the need to help people in vulnerable positions.

Ms. Dawn Primarolo: I shall make two points to the hon. Member for Taunton (Mr. Nicholson), the first by way of advice: beware Ministers bearing tables quoting poll tax figures; do not make press statements until the final figure is announced. Secondly, when he goes to the Minister to negotiate a better grant settlement for his local authority, we should like to add a few more local authorities to give him a rather long list. I am sure that he will be prepared to argue for Avon county council, a hung council, run by the Tories, in which Kingswood is based.

Mr. Raison: rose—

Ms. Primarolo: I have not started yet.

Mr. Raison: I thank the hon. Lady for allowing me to interrupt so early. Any local authority wanting to increase its revenue support grant next year might note that one


factor which contributes to the size of the needs element in the revenue support grant is the number of false fire alarms. Therefore, if one stimulates many false fire alarms, the needs element goes out.

Ms. Primarolo: I am grateful to the right hon. Gentleman for that little tip, which I shall pass on to the local authority in Avon.
To return to the instruments that we are discussing tonight, when there is a massive redistribution of income through cuts in income tax for the top scale of those who pay the tax, little is said by the Government, although there is a massive loss of income to the Exchequer. When pensioners, the disabled, single parents and those on benefits are given a 50p a week or 25p a week increase, we are supposed to congratulate the Government on their generorsity to those people.
When we have debates on social security in this House, a little puzzle always goes through my mind: how is it that the Government keep telling us that they are spending so much more money which people in need are receiving, yet the people themselves are not getting any more disposable income—in fact, they often end up with less money? I have finally come to the conclusion that, if the social security system is set in the context of the 1989 reforms that the Government have undertaken over a period, what has been set up is a much meaner system all round.
Even so-called acts of generosity—such as the Government finally giving the war widows their increase—are transferred into people's lives as further cuts. I shall give the example of one of my constituents whom I mentioned in an earlier intervention and about whom I shall write to the Minister. Her name is Mrs. Bidwell. She is 81 years old, and suffers from Parkinson's disease and a number of other illnesses. She is in a private residential nursing home. Her daughter called to see me; she is allowed to earn £40 a week under the new regulations because her husband is in receipt of invalidity benefit.
Mrs. Bidwell now pays £270 a week to the private nursing home. She has to be in a private home because there are no other types of nursing home in our area. The nursing home charge went up to £295 a week from 1 February, and at present there is no increase in her income support to compensate for the increase in nursing home charges, so she has lost her £40 and is now £2 a week worse off. When the Government increase income support by £10 on 1 April, her net loss will be £32. Therefore, of the £40 that she was given—supposedly disregarded—she has only £8 a week left, with which she has to buy all her extras such as toiletries.
Naturally, Mrs. Bidwell's daughter was extremely upset and distressed when she called to see me. She felt that it was outrageous that her father, who had been killed, as she said, fighting for this country, and her mother, who had struggled all her life raising five children, had finally won justice in the form of the £40 a week rise only to have it taken away because it was still included in the calculations for income support. I should be grateful if the Minister would write to me about this.
That example highlights another point about the Government's policy. Such people are worse off because the Government have allowed the privatisation of nursing

homes, which are now able to charge whatever they like. As the Minister said, the Government have no control over those increases.
Clearly, under the benefits system, the Government are robbing Peter to pay Paul. When extra benefits are given, they are clawed back from other parts of the benefits system. My case work load shows, as I am sure those of many hon. Members do, that claimants from all the priority groups identified in the 1989 social security reform —pensioners, single parents and those leaving institutions to settle in the community to try to establish a normal life—are in extreme need. Those people are being refused grants and loans because of insufficient funds in the local office.
The social fund manager in Bristol, South confirmed yesterday that, despite January's top-up of £8,000 on the grant budget and £25,000 into the loans budget for this financial year, there was to be no change in the policy which rules out a category of claimants from qualifying from that fund. Those who have been ruled out are families under exceptional stress. No one in the Bristol, South office area who comes in that category will be considered for loan or social fund grants. The local office policy is to rule out claims for grants or loans from families under exceptional stress, even though that is one of the priority groups in the social fund manual. Therefore, single-parent familes are being singled out for exclusion from cash. That is the opposite of the undertaking and promises that have been given in this Chamber.
From my case load, it is clear that discretion in the discretionary system operates to exclude the needy from help in order to allow the DSS managers to balance their puny budgets. From the claimant's point of view, there is no discretion or flexibility, merely interminable bureaucracy leading to closed doors. I shall give a couple of examples of such treatment.
A single mother on income support and her two children—one aged two years and the other four months—spent two months in bed-and-breakfast accommodation and were then housed in unfurnished accommodation. She applied for a community care grant of £940 for essential furniture. There is nothing in the house—not even floor coverings. In her letter she said:
My daughter and I are sleeping on the floor"—
bare floorboards—
with borrowed blankets from a neighbour. I am very depressed and cannot look after or care for myself and my children in these conditions—we have nowhere to store our clothes and no means of cooking our food.
The grant was refused because
there are no exceptional circumstances",
to quote directly from the social fund officer's decision in October 1989.
The demands on the budget at the time were so great that these circumstances were considered unexceptional enough for the claim to be disallowed. I dread to think what an exceptional claim in Bristol, South is. If those circumstances are so unexceptional in the welfare state, exactly whose welfare is the state protecting? I suspect that the state is looking after people with money who are getting tax cuts.
One of my constituents who was re-establishing himself in the community after a long period in prison secured the promise of employment, which was vital to him, on a construction site, provided that he had his own tools. He applied for a community care grant. Those grants, we are


told, are aimed at priority categories. His application was refused. It was not even considered, because the rules stipulate that such items are specifically excluded.
A woman who was born in 1908 was recently hospitalised after she suffered a stroke that disabled her last summer. She needs constant day and night care. Her daughter is on income support. She could not afford the daily bus fares—which worked out at £15·40 a fortnight—to visit her mother in hospital. She visited the hospital daily because she was being trained by the staff to care for her mother.
They applied for a community care grant, both for the fares and for the additional items that they need at home. The old lady is incontinent. Their grant application was refused because the circumstances were unexceptional. Bus fares are paid only for the parents of sick children. Once again, both claimants were told that they were not in the exceptional need categories. Time and again we are told that the benefit system is targeting the needy, but time and time again the needy are told that their circumstances are unexceptional.
A Bristol-based charity wrote to all the advice-giving agencies asking that the number of applications made to its charitable fund for help for those in exceptional need but who had been refused grants and loans from the social fund should be reduced because its funds were running out. The Government are breaking up the decision-making process, thus reducing the amount of money that is paid to people in need. They try to convince us that they are giving them more money, but that is not true. At one time, we could be proud of our welfare state. How can we be proud of a welfare state that describes the needs of those people as unexceptional? How bad do people's living conditions and their poverty have to be before the welfare state recognises that they need support?

Mr. Robert G. Hughes: I listened with care to the harrowing constituency cases that the hon. Member for Bristol, South (Ms. Primarolo) drew to our attention. I am sure that she will concede, however, that it is difficult to understand all the facts surrounding constituency cases until we have all the details. I therefore cannot comment on the cases that she has drawn to our attention.
The hon. Lady's sincerity and depth of knowledge compares favourably with what was said by the only other Labour speaker in the debate so far, the hon. Member for Oldham, West (Mr. Meacher). His insincerity and vagueness went down extremely badly on Conservative Benches—and perhaps on Labour Benches as well. He told us that he wanted to talk about poverty and relative incomes. He did neither. Perhaps he thought that it was sufficient to mention them and then to move on to something else.
The hon. Gentleman said that he would outline the Labour party's policy. We should have known better than that. All he did was to add to the interminable list of areas where the Labour party's policy is, to put it at its kindest, far from clear. It is also deliberately transparent. Over £1 billion a week is spent on social security. We have to ask whether that is sufficient. The Labour party has a duty to the House and to the electorate to say what it would spend. Perhaps we shall be told later what the size of the Labour party's social security budget would be this year, if it were

in office. I think that I can guaranteee that we shall not receive an answer to that question, since the Labour party has not bothered to answer all the other questions that it has been asked.
Under this Government, the social security budget has increased in real terms by 36 per cent. since 1979. That is far better than the Labour party's record when it was last in government. Whether it would be found to be better than the record of the next Labour Government, should there ever be one, we do not know.

Mr. Eddie Loyden: Does not the hon. Gentleman agree that people are living below the poverty line and that bandying figures about will not change that fact?

Mr. Hughes: I shall deal with the figures during my speech. The Labour party wants people to look at its social policy through rose-tinted spectacles. It does not want them to look at the figures. If the Labour party cares about the problems that face the poor, it must tell us what a Labour Government would spend; otherwise, it cannot be taken seriously.
Is the £1 billion that is being spent each week on social security going to those who are most in need? My right hon. Friend the Secretary of State gave a number of examples of additional money being specifically targeted on those who are most in need. I shall give two other most important examples of people who will be most grateful for additional help from the Government.
The first is the extra £100 million a year to help 500,000 disabled people and their carers. Those people particularly needed extra money and they will get it as a result of the uprating. Secondly, those of us with young children know that they can be a great expense, but people with severely disabled babies must face enormous extra expenses. The fact that families with severely disabled babies whom one parent stays at home to look after can receive an extra £65 a week under the uprating is a matter on which the Government are to be congratulated.
The hon. Member for Oldham, West pretended to answer one question, but in fact he did not. He told us that the Labour party will restore the link with earnings. He told us how the pensioners and other groups have been robbed by the Government because of their failure to keep the link with earnings. But he failed to tell the House that the reason why the Labour party made the link with earnings, as opposed to a link with inflation, was that that was the cheaper option. The Labour Government had so lost control of the economy, and inflation was so high, that that was the only option that they could afford.
If, as the hon. Member for Oldham, West said, the link with earnings would be restored—he hedged his comments about with some weasel words—he must answer a further question. If a Labour Government lost control of inflation, as they undoubtedly would because their policies point in that direction, would they restore the link between the cost of living and the annual upratings? Would they use the best method or the cheapest method?
The Labour party uses statistics to disguise and distort reality instead of telling us the truth—

Mr. Battle: I want to get the record straight, since the hon. Gentleman has talked about distortions. Did not the Labour Government offer a link either with earnings or with inflation, whichever was the higher? That is the truth.

Mr. Hughes: No, it is not. History shows that that is false; otherwise, pensioners' incomes would not have fallen so far behind the cost of living under the Labour Government, who stole their £10 Christmas bonus and took away many other things from them. The Labour party cannot preach on this subject, as it allowed pensioners' incomes to fall behind the cost of living.
The Opposition use a number of statistics when discussing the incomes of poorer people, but they use them to distort. Why did they not tell us that between 1981 and 1985 the living standards of the bottom 10 per cent. increased by 8·3 per cent., against an average 6·4 per cent.? Why did not the Opposition tell us that real take-home pay for those on half average male earnings has risen in 10 years by 28·7 per cent.? Between 1973 and 1979 it rose by a pitiful 2·4 per cent.
Why did not the Opposition tell us that, for many of the poorer people in society, tax reductions have an enormous impact? Why did they not congratulate the Government on the fact that the personal allowance increase has taken 1·7 million of the poorest paid people out of paying tax altogether? The answer to all those questions is: because it is uncomfortable for the Opposition.
We can never be satisfied that all those who are most in need are being helped. I would never suggest that they were. A problem mentioned by the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood), in an honest and reasonable speech, and by the hon. Member for Bristol, South, related to those living in private homes for the elderly. What I want to say applies also to elderly people living in some of the homes run by housing associations. We would all accept that many, if not most, of those homes are run to high standards, but the money available does not cover their running costs. As a member of a committee of a housing association, I know that the money that we receive from the DSS does not cover our running costs, so we are running at a loss on some of the people whom we want to keep in the homes. That problem must be dealt with.
I want to discuss two issues connected with housing—first, housing benefits. I hope that all hon. Members agree that it is no criticism of anyone to say that housing benefits have hardly been mentioned in the debate, and for a good reason. If one discusses housing benefits in terms of their relationship to any of the rented sectors, my right hon. Friend the Minister of State will rightly reply that they are a matter for the Department of the Environment; but if one raises the subject of housing benefits with a Department of the Environment Minister, he will reply that it is a matter for the Department of Social Security. It is thus impossible to debate whether the figures in the upratings are reasonable or unreasonable, sufficient or insufficient, because they have to do with housing policy.
I firmly believe that housing benefits must be returned to the Department of the Environment. The only reason why they have not been returned so far is the opposition of civil servants in the Department. They do not want them back; one told me once that they did not want the bother of them. However, most of us recognise that housing benefits are important and we believe that they would be better administered alongside housing policy. As such, that would be better done by the DOE.
I want finally to mention a group who may see little or nothing from the upratings—the visible homeless. They are not a problem; they are a series of interrelated problems needing a variety of solutions. Such solutions

will help many vulnerable people who cannot cope with society. Many of those whom I am discussing, who sleep on the roadside and in shop doorways, could not cope in a house or flat. Many of them would even reject a conventional hostel.
I should like to suggest an additional form of help as part of the pattern of provision. I propose minimalist hospitals funded by the Government and run by the voluntary sector. People could crash out and get a meal in them, and most importantly, they would have access to psychiatric and counselling help. Without such provision, many people will inevitably continue to sleep rough, whatever other solutions the Government come up with.
We must face the problem honestly: many of those whom I am talking about will still prefer to sleep in the streets. Near where I live there is a lady who has lived by the side of the road for 25 years. She has a bed in a mental hospital around the corner and she goes there when it is very cold and for her meals. It is precisely such people, and young people who find themselves in the same position, who need specific but non-threatening help. I hope that the Government will turn their attention to that in their welcome reappraisal of the help that they give the homeless.

Mr. Clifford Forsythe: I welcome some parts of the uprating—for instance, the extra help for poorer families—but I hope that there will be greater take-up of family credit in future. Until now, the take-up has not been good enough, and I hope that some effort will be devoted to publicising the benefit.
I also welcome the extra help for the disabled and their carers, although I have a feeling that the improvement is being paid for by the freezing of child benefits and the cutting of statutory sick pay.
It is disappointing that benefits in general have not been uprated in line with inflation. The most obvious example of that is the freezing of child benefit, which concerns many people. The right hon. Member for Aylesbury (Mr. Raison) made an excellent speech in which he put the case for child benefit very well. I hope that Ministers listened to it.
It is said that child benefit will eventually be phased out, but if it is, the Government will have cause to regret that at the next election, leaving aside high interest rates and the community charge.
The social fund has also effectively been frozen for the third year at around £205 million, despite numerous reports of more and more claimants being turned down for grants or loans for urgent needs. The full effects of the way in which the social fund operates are only now becoming clear. Unfortunately, they will become clearer as time goes on.
Those effects were concealed when the social fund was introduced because an applicant who genuinely required help through force of circumstances could, or perhaps one should say were forced to, take a loan instead of a grant. That loan had to be repaid, reducing the applicant's income. If a further problem befell one—for example, if a cooker needed to be repaired quickly—a further loan had to be made resulting in higher payments. Such applicants may eventually be unable to apply for an emergency loan


because they have exceeded the amount of weekly payments that they are rightly allowed by DSS rules. That is a continuing situation that can only get worse.
Unfortunately, it is at that stage that the sad part of the story begins. Such people then turn to the only source of cash available— the moneylenders. People who, for the best of reasons, need finance but cannot obtain it from the social fund, either because of high repayments on previous essential loans or because no money is available in the fund, then approach loan sharks. Such people will then be worse off than they were in the beginning. High interest charges and intimidating collecting methods become their fate.
It is not unusual for people in such a position to hand over their benefit books in order to obtain a loan. The debtor is then allowed to take the book to cash a weekly order, which he then uses to pay the required amount of money to the lender who then retains the book for the future. That, sadly, is one of the bad results of the social fund which is there to help people. The situation can only get worse.
Support levels for people in nursing or residential homes do not match the rate of inflation. They certainly do not match their needs. Yet more and more such homes are being required as a result of Government policy in other areas, bringing people into the community who then end up in such homes.
Retirement pensions are uprated in line with inflation, but I am disappointed that they are not being increased in line with average earnings. The pensioners of today once created the country's wealth. It is a disgrace that they are now being treated so shabbily.
I am glad to have had the opportunity to point out some of the concerns that I and my right hon. Friends have about uprating. But other hon. Members hope to catch your eye, Mr. Deputy Speaker, so I shall conclude my remarks and hope that they will deal with some of my other worries.

Mr. Tim Smith: The hon. Member for Oldham, West (Mr. Meacher) said that he wanted a broad debate on incomes, benefits and poverty generally, but he proceeded to make a narrowly based speech. He talked only about state provision. Whether one considers the position of pensioners, those who are at work and become sick, or families, it is not good enough to look only at what the state provides. One must look at a broader picture, but the hon. Gentleman failed to do so.
The hon. Gentleman also complained about the cut in invalidity benefit at the very moment when the Public Accounts Committee is considering why expenditure on that benefit is rising so fast and the number of claimants has risen so rapidly.
The hon. Gentleman might have recognised that the 1980s were a decade when the average income of most pensioners rose more rapidly than ever before. That was not due to state provision alone. The position of pensioners improved because of private sector provision—occupational pensions.
As my hon. Friend the Member for Taunton (Mr. Nicholson) said, European comparisons no longer stand up to close examination because at the end of the 1980s the pensioner is much better off than he has ever been before.

Of course there are exceptions to that, and that is why my right hon. Friend the Secretary of State was right, last October, to give extra benefis to those in most need.
The Government have the right approach to social security benefits. It is right to give the extra cash that is available to those who are most in need. That is why I welcome this series of orders. In particular, I welcome the new carers' premium and I especially welcome the fact that the attendance allowance is to be extended to babies under two. The abolition of the earnings rule last October was most welcome, as is the substantial improvement to be made in April by the Department of Social Security and the Ministry of Defence to the war widows' pensions.
On child benefit, too, it is right to look at the overall position of families. My right hon. Friend the Secretary of State gave the House an interesting piece of information. He told the House that, over the past 12 months, the average net income of a working man had increased by more than £20 a week. It is that that we need to look at when we consider child benefit.
If we compare the Government's record in just the past 12 months with the previous Labour Government's record, we can see why the policy announced by the hon. Member for Oldham, West is such a fraud. We all know that, if we have the misfortune to have another Labour Government, it is most unlikely that earnings will rise in the way that they did during the 1980s. Earnings will probably only just keep pace with prices, as they did under the previous Labour Government. Since there is no question of retrospection in the Opposition's proposal, it amounts to no more than a confidence trick.
When child benefit has been reviewed each autumn recently the Government have been right to say that the appropriate policy is to freeze it and to devote the extra resources to other benefits. But I also agree with my right hon. Friend the Member for Aylesbury, (Mr. Raison) that we need to come up with something better by the next election and to have a clearer policy. He suggested one alternative, which was to double child benefit and abolish the married man's tax allowance. He thought that the Government were inconsistent in introducing new tax allowances while at the same time freezing benefits.
Up to a point, I agree. I even took the trouble to come here last week to explain to the Treasury why I thought it was wrong to introduce a new tax relief for private health premiums. The Department should look carefully at my right hon. Friend's proposal, but other possibilities could be examined.
For example, it has been suggested that we could have a higher benefit for children under five and a lower benefit for children over five on the ground that it is during that first period that the mother is less likely to be at work, so it is then that the family is most likely to be in need of help. Against that, it could be argued that children get progressively more expensive, as I believe to be the case. That would suggest that the benefit should be the other way round.
It would be sensible to have a proper debate about how to proceed. It is not sensible simply to index-link child benefit year in, year out, when so many families that receive it do not need it. We need to come up with something better. I hope that my right hon. and hon. Friends in the Department will consider that and try to come up with something better. Subject to that, I welcome these orders.

Mr. John Battle: As an introduction, I shall make a few remarks about the context of the debate. We are being asked to approve an uprating on the same day as we read that some right hon. Members fare very well indeed. I refer to the second, or what in all justice should be called the third, job of the right hon. Member for Blaby (Mr. Lawson), the former Chancellor of the Exchequer. Let us not forget that his Budget last March and previous Budgets set the structural arrangements for this uprating and for previous arrangements for people on low pay and in poverty. I agree with the right hon. Member for Aylesbury (Mr. Raison) that we always have the difficulty that we cannot discuss tax and benefit arrangements in the same debate and relate one to the other.
We now hear that the right hon. Member for Blaby has been offered another job at £40,000 a year, working as an non-executive director of GPA, the world's biggest aircraft leasing company based in Shannon, County Clare. That is on top of the job that he has already been offered at £100,000 a year, working two days a week for Barclays.
That focuses our attention on part-time work, which is a crucial issue in this debate. The right hon. Gentleman may well have spare time to write his memoirs and fit in political activities with doing those two jobs, but it is a shocking contrast with the 9 million people in part-time, temporary and low-paid work who make up the bulk of people in poverty, because low pay is the primary cause of poverty.
Today, the working party set up by Sir Gordon Borrie, the Director General of Fair Trading, reported that more than 200,000 households were in severe debt difficulty and that a further 500,000 people were having difficulty in coping with the debts that they had incurred. I hazard a guess that many people with such debts are precisely those who are on much less than the average wage. I am tempted to believe that most people with such debts are on low pay or low benefits.
I do not have time for a part-time job because I fill all my time responding to the inquiries of constituents who find it hard to get by on low incomes, low benefits and low pensions. I shall quote an example from the Department of Social Security agency benefits unit:
Mr. Garnett's requirements have been calculated at £75·60, comprising of a personal allowance of £54.80 for a couple, a £19·50 disability premium as Mr. Garnett is in receipt of invalidity benefit, plus £1·14 a week housing costs. The latter consists of rent and general rates less housing benefit and the statutory 20 per cent. deduction of the gross rates. There is also a £12·50 deduction in respect of non-dependents. (Mr. and Mrs. Garnett's daughter Denise lives with them)…The comparison between Mr. Garnett's resources of £75·60 and his requirements of £75·44 resulted in an excess figure of £0·16. On this basis they are not entitled to help with prescription charges and are deemed able to meet the first £0·48 of any other NHS charges…I am sorry that this reply may be disappointing for Mr. and Mrs. Garnett but I hope you feel the explanation helpful.
It is more than disappointing when people are trying to survive on incomes which are below half or even a third of the average wage.
In another case, Mrs. Whiteley has an income of £49·31. Her needs are £46·10. She is not eligible for income support and the extra £2·50 that she received last October makes no real difference to her income.
Mr. and Mrs. Stanley wrote to me to say:

We are not destitute, but over the last 12 months the cost of living has risen so much. Every week the cost of different items, especially food, it is frightening to think of what is to come and new clothes are a non-entity.
The future looks very grim, I dread to think what next year will bring, what with the poll tax and increases are expected on electricity etc…My Wife and myself know how things are worsening from the fact that the small luxuries that we used to enjoy, such as a visit to the theatre and an occasional evening meal, to celebrate a birthday or anniversary are now a thing of the past.
They are hardly living on the average income or even half the average income, yet they are being denied some of the things that we take for granted as ways of participating in society.
Today I received a letter from someone who was worried about residential nursing homes. I ask the Minister to consider this issue. I tabled a parliamentary
question asking why personal expense allowances, in particular the pocket money part of the board and lodging allowance, are being reduced to top up fees paid to private residential establishments. That pocket money is being absorbed. I hope that the Minister will suggest that that money will not be absorbed and that people will not have their pocket money withdrawn to cover increasing costs. Although the order suggests that there will be an increase of £10 a week, it will not match increases in inflation or needs. There will be a shortfall in the provision for the true cost of care. Many people will have to pay a huge shortfall out of their own pocket. The shortfall should not come from the personal expenses allowance.
I do not have time to speak about the knock-on effects on rents. The hon. Member for Harrow, West (Mr. Hughes) said that he had noted that only one Labour Back-Bench Member had been called so far. May I assure him that there is plenty of scope to talk about housing benefit.
At the turn of the century, Seeborne Rowntree, in his study of York, identified one of the primary causes of poverty as the fact that people have to spend almost a third of their income on housing costs—either on rents or to purchase their home. I should like the Government to tell us what market rent levels should be, because it is the policy of the Department of the Environment to push up rents to market levels which will absorb more than a third of people's incomes and effectively price them out of their housing.
I hope never again to hear Conservative Members make comments such as those which the hon. Member for Welwyn Hatfield (Mr. Evans) made on 24 January. He suggested:
The long term homeless have turned their back on society.
He continued with a little slip:
Young offenders should be the responsibility of their parents, not of this Government. The Government have done quite enough for the homeless. I hope that they will spend no more money on them."—[Official Report, 24 January 1990; Vol. 165, c. 879.]
I invite the Minister to repudiate that remark, and to dissociate himself and the Government from those ill-informed remarks. Not least, the Minister should not associate himself with the suggestion that anyone who is homeless is also a young offender. That criminalises the victims of homelessness and blames them for their plight.
In an intervention, I mentioned child benefit. I hope that the Minister will accept that raising means-tested


benefits is not adequate compensation for failing to maintain a non-means tested benefit which could cut through the poverty trap.
The Secretary of State has shifted from using the word "targeting" to "focusing". I suggest that the Government have bifocal vision. They see through one lens the larger image of tax cuts and those who do well. Then they look through the other lens and see a smaller image where they are reducing benefits. As my hon. Friend the Member for Oldham, West (Mr. Meacher) said, it is clear that money is being taken from the poor and redistributed to the rich. In booming Britain, it is not enough to tell us about average wages. It may be that those who are at the top are doing well, but those at the bottom are paying the price because their incomes are going down. It is possible for that to happen even when the average is rising.
We have a new Secretary of State for Social Security and a new Chancellor of the Exchequer. Already the new Chancellor is rejecting the policies and direction of his predecessor. I hope that the Secretary of State for Social Security will say, "Now that we have a new Chancellor of the Exchequer with new policies, why should we accept the uprating statements of his predecessor?" I urge him to take that statement back to the Chancellor and ask him to look at it again to see whether the Treasury could be more generous to those in need rather than insisting that the House divide on it tonight. If we have to divide on it, I urge hon. Members to vote against it.

Mr. Edward Leigh: I am grateful to the hon. Member for Leeds, West (Mr. Battle) for allowing me three or four minutes in which to speak at the end of this interesting debate.
I have always thought that there is something rather artificial about these debates, and to listen to the hon. Member for Oldham, West (Mr. Meacher), one would think that when looking at the Treasury Bench, one was looking at Scrooge before his conversion. That image sits unkindly on the shoulders of my right hon. Friends the Secretary of State and the Minister for Social Security, and does not accord with the facts.
I do not want to repeat what has already been said, but we have a social security budget of £55 billion, and in 1992–93 it is forecast that it will be 4 per cent. above inflation, running up to £63 billion. Therefore, the argument that we may have to address is not that the Government have been less than generous, but that we must now establish where we are going. That is why I wanted two or three minutes in the debate to put down one or two markers.
The Government have won the argument against economic collectivism. Indeed, that argument is being won right across Europe and not only in this country, but we have not yet won the argument on social collectivism, and we must now address that problem in time for the general election. After all, we have a Government who are courageous enough to address the difficult subject of the reform of the National Health Service—I applaud what the Government are doing—and I believe that we have a Government who will be courageous enough also to address the problem of a social collectivist society.
That is a difficult problem to address, and nowhere is it more difficult than in the conundrum of child benefit. On the one hand, we have a universal benefit, which is

universally taken up, does not add to the poverty trap, and which we should all like to keep; on the other hand, it is given to all members of society regardless of wealth.
In addressing that problem, perhaps we should think in terms of combining the two structures of taxation and benefits. I hesitate to say this to my distinguished colleagues on the Treasury Bench, but perhaps the Department of Social Security should become part of the Treasury.
When I talk of the two systems being combined, I am not talking of a tax-credit system or of a system of minimum income guarantees. However, as my right hon. Friend the Member for Chingford (Mr. Tebbit) argued in The Times earlier this week, perhaps we could use a combined taxation and social security system to try to encourage people to invest not only in bricks and mortar, but in social security provision, pension care, health and education. It is an exciting prospect and one to which the Government must look if we are to solve the problem of how we can cope politically with a social security budget that is now running at £1 billion a week.
Finally—I know that this is a courageous remark, but it must be made—I am not questioning that we have a commitment to provide all those who are now of working age with a state pension that will keep pace with prices, but we must remember that the state pension now accounts for £28 billion out of the total budget. Perhaps we should use the taxation and benefit system to give people more incentives and to encourage future generations to provide for their own future.
If we are to be honest with people, we cannot continue to tell young people that the state can provide for them. I stress that I am not talking about people in middle age or those coming up to old age, and I am certainly not talking about old-age pensioners. Perhaps we should have the courage now to encourage young people, through the taxation and social security systems, to invest in their own future.
As a society, it is easy to be generous with other people's money. However, those societies that are most collectivist are often the most barren in personal generosity. The taxation and social security system must encourage personal generosity. We must escape from our dependency society, which creates two nations. If we had the courage to address those problems, I believe that we could make considerable progress and seek to end the ratchet effect of an increasingly collectivist society.

Mr. Paul Flynn: It is a pleasure to reply to this informative and worthwhile debate, in which we have heard creative ideas and constructive arguments from hon. Members of all parties. I deal first with the final points of the hon. Member for Gainsborough and Horncastle (Mr. Leigh), who seems to have swallowed the myth of Government generosity as a result of the £55 billion figure. Although that figure is impressive in itself, it represents only 9.7 per cent. of our gross domestic product, whereas as recently as three years ago the social security budget accounted for 11·5 per cent. Therefore, with an aging population and growing demands for more expensive medicines, we are spending less on such services as a proportion of our national wealth.
The hon. Members for Beaconsfield (Mr. Smith) and for Taunton (Mr. Nicholson) made useful contributions


about the great difficulty of making comparisons with our fellow members of the European Community. Although they are real, there is no question about the selectivity of the figures quoted by the hon. Member for Taunton, which did not help the argument. The European Commission has made a serious attempt to make objective and valid comparisons. It took as its standard the amount paid to each new pensioner who had worked for an average wage in manufacturing industry and it compared the figures for each country in two ways.
First, the cash amounts were converted into European currency units by using a standard rate of exchange called the purchasing power standard, which takes full account of the cost of living in each country. The pension was thus related to what it would buy locally. The United Kingdom came badly out of that comparison because, on that basis, the British pension is £55, which is barely half the £104 paid in Luxembourg and the £101 paid in the Netherlands. In that comparison, Britain was beaten into bottom place only by Ireland.
The second comparison involved calculating the pension as an average of manufacturing earnings in each country after taking account of tax. The figure of 100 was used as the base for the ratios. On that basis, the best countries in Europe paid 90 per cent. of average earnings, while Britain came bottom, along with Ireland, paying 46 per cent. I do not ask the Government to accept those figures, although they were produced independently by the European Commission which does not have an axe to grind. However, I have used parliamentary questions to ask the Government to carry out the same calculations themselves.
Sadly, the reply has been that the figures cannot be given except at disproportionate cost. That is an unfair answer. If they want to make a comparison, the Government should match the figures from the European Community. The truth is understood by our pensioners—not only by the ones who have been on holiday to Greece—that, especially in relation to West Germany and to France, they have fallen behind their European counterparts in many ways.
If we want proof of the way in which the Government present their figures, we need only to consider the thoughtful speech of the right hon. Member for Aylesbury (Mr. Raison), who, like his hon. Friend the Member for Gainsborough and Horncastle, referred to the European tradition and to how we should set an example to the newly democratised countries in Europe. I hope that those right hon. and hon. Members saw a telling programme a few weeks ago on Channel 4 in which a Conservative Member was rash enough to explain how to write a manifesto to aspirant Members of Parliament from Hungary and Poland.
I shall not identify that hon. Member because I am a kindly person, but he said, "In the Conservative manifesto of 1987 we made a promise about child benefit, saying that it would be paid as now and direct to the mother. Of course, when we come up against a problem, we can look back to the manifesto and if we want to pay the benefit, we can pay it, but if we do not want to pay it—if we want to freeze it—we can freeze it, because the sentence was ambiguous." There is the truth of the Government's duplicity in this matter.
The minor calamity of the national insurance scheme has hardly been mentioned in the debate. The scheme has been plundered and pillaged by the Government during the past 10 years. They have jacked up the contributions from 6·5 per cent. to 9 per cent. and have held down the benefits. The Government have had a particularly bad year this year. I can remember the Minister of State describing the buoyant state of the national insurance scheme last year. He said that we were heading for a surplus of more than £2 billion on the year—and, indeed, the Government achieved that.
On that basis, we as a Parliament decided for the first time since 1911 to withdraw the Treasury supplement. It was significant that in 1911 Lloyd George sold the idea by saying, "You'll get 9d. for 4d." The Government contribution has been more or less the same for a long time. Even in 1979 it was paid at the rate of 18 per cent. If it were still at the same level, the Government contribution to the national insurance scheme would be £5·3 billion. That would go directly to pensions. When hon. Members ask where the money comes from, let them remember that figure.
What has happened this year? We were promised that there would be a surplus on the scheme of £519 million. A few weeks ago, we were told that there is a deficit of over £900 million, an error of £1·5 billion. The Treasury supplement has gone, but the deficit is also caused by the large take-up of personal pensions. Nearly 4 million people have taken up the bribe offered by the Government on personal pension schemes and their contributions have been denied to the national insurance scheme.
Therefore, the genuine rises that pensioners should have had have turned up in the profit sheets of insurance companies. It was no coincidence that, on the very day it was announced that the national insurance scheme had lost £1 billion, the Prudential announced a 26 per cent. increase in business, including 250,000 new personal pension schemes. So we are targeting the scheme to give to the richest pensioners of the day after tomorrow by robbing the poorest pensioners of today.
The Secretary of State gift-wrapped the changes to be made in the statutory sick pay scheme. It was an interesting performance. He said that he was criticised by someone—a sketch writer, I presume—for not being jovial enough at the Dispatch Box. I was once unkind enough to accuse the Minister of State, when his jovial mask had slipped, of wearing the guilty look of a vulture that had stolen the wrong eyeball—a description borrowed from America. I think that that is a suitable demeanour for Ministers who are carrying out the wretched task of dismantling the welfare state and spreading misery.
What is behind the extraordinary decision on the statutory sick pay scheme? The Secretary of State mentioned that it had been considered by the Social Security Advisory Committee. Indeed it was, and the committee disagreed with it. The Government announced their decision in October but did not put the details out for consideration until late in December, just about Christmas. Opinions were received from 13 prestigious groups and individuals. The view was unanimous: they all said that it was wrong. However, we are going back to the old eastern European strategy. There is not so much a consensus as a Ceausensus, as Mr. Ceausescu would have understood it. The Government ignored all the opinion that came in and have gone ahead with their scheme.
The Secretary of State mentioned several times the increase in benefit. It is an increase of 25p for a small group. At the other end there is a cut of £3·55. One point is very important. The Minister made light of the fact that it is a cut of between £70 million and £80 million, but there will be a severe cut for 2 to 3 per cent. of workers, the disabled, who will find it difficult to get employment because their employers will have to pay the full cost. There will be a great additional burden for people in that position. It makes a mockery of the Government's claims about helping the disabled.
Behind the changes in statutory sick pay introduced by the Government is another part of the strategy of reducing the panoply of the welfare state. One wonders why the Government go on in this way. My great fear is that the myriad of small cuts here and there—little deceptions in the Health Service and elsewhere—mean that we are going down precisely the same road as they did in America in the late 1970s and early 1980s. The British Government are adopting the same philosophy as America. As all who have visited America know, there are 3 million casualties of the collapsed welfare state. There are 3 million walking wounded, many with histories of mental illness, living on the streets—the homeless, the shunned, the despised, the tent people.
We have a social fund that is not delivering. Terrible cases are brought up week after week—a boy who was told that he could not have a loan because he could eat in soup kitchens; a pregnant mother who was told that she could not have a loan for a bed two days before her baby was due because she could sleep on the floor; a disabled husband and wife who were told that they did not need a grant for a cooker because they could go out to eat. That is the reality of Britain today. Anyone who walks the streets of London sees a growing army of despised and homeless. Bush has called America's homeless America's shame. What is being created now will become known as Thatcher's shame.

The Minister for Social Security (Mr. Nicholas Scott): As the hon. Member for Newport, West (Mr. Flynn) ended with an American analogy, I am inclined to refer to his speech by using the words of a former mayor of New York who said of an opponent's speech that however it was sliced, it was still baloney. The hon. Member for Leeds, West (Mr. Battle), for Oldham, West (Mr. Meacher) and for Newport, West portrayed the present state of the social security system in a totally distorted and perverse manner.
My hon. Friend the Member for Gainsborough and Horncastle (Mr. Leigh) entered robustly into the lists. The ratchet that he described was a phrase invented, I think, by my noble Friend Lord Joseph. I think that the ratchet has been moving rapidly in the opposite direction for the past 10 years. We are not moving toward the collectivist society that Lord Joseph envisaged when he invented that concept.
Before dealing with the detailed points raised in the debate, I want to correct some of the apparent misunderstandings on the Opposition Front and Back Benches about the Government's record on social security. It is easy for Opposition Members to forget that, since 1979, spending on benefits has risen by 36 per cent. Spending on the elderly is up by 24 per cent. ; spending on

the long-term sick and disabled—a group in which I take a particular interest—has almost doubled; spending on working families with children is double the spending through its predecessor, family income supplement.

Ms. Clare Short: That is not true.

Mr. Scott: It is true beyond peradventure. I cross swords with the hon. Lady in Committee twice a week. If she wants to intervene, she may, although she will understand that I have only 13 minutes left in which to reply to the debate.

Ms. Short: I shall be brief. This is a crucial question in the conflict between the two sides of the House. The question is how we share the economic growth that we have, year in, year out. The Government have not allowed the poor, the sick and the elderly to share in the economic growth. There has been marginal growth, but they have got worse and worse off.

Mr. Scott: What is true, and cannot be denied, is that at all levels people have benefited and have had improved standards under the Government. I do not resile for one moment from the fact that there has been more inequality. I believe that the competitive society, which includes extra rewards for those who do well, is the engine that enables us to provide the resources for the poorest. For Opposition Members, at least some of whom were members of a Government who failed manifestly to have sufficient economic resources to provide for the poor, to criticise us for a growth in inequality while we are still managing to provide resources to look after the poor, the sick and the elderly, is beyond the pale, as we used to say across the water—as the hon. Member for Antrim, South (Mr. Forsythe) will remember. We are certainly not seeking to starve the social security system of resources. The hon. Member for Leeds, West had some fun with the change of phrase from targeting to focusing. We are trying to make sure that the help available in the social security system goes to those who are in real need.
I should like to deal with a couple of points made by the hon. Member for Newport, West. It is not really the incentive that has created the problem within the national insurance fund—there were two other matters: the ordinary rebate was introduced for all contracted-out schemes some time ago and this was combined with the reduction in national insurance contributions, a move widely welcomed on both sides of the House when it was introduced.
Nor is it any good looking at European pension provision and trying to compare it with ours in the way that the hon. Member for Newport, West did.

Mr. Flynn: rose—

Mr. Scott: I am sorry, but I now have only 10 minutes.
We are concerned about total pensioner incomes. It is all very well to draw on some theoretical position in which people might find themselves in Germany or France if they had paid enough contributions, if their earnings had been at certain levels, and so on. It is the total income of pensioners that we are concerned with—and very few countries in the Community keep any data at all about the total income of their pensioners. The hon. Member for Oldham, West said recently that he would be the first to admit that it was difficult to make comparisons with


Europe, not only on pensions but on other aspects of social welfare, and that any comparison must be significantly qualified.
It would be a help in discussing these matters to get away from European comparisons. It is clear to me that it is the total income and standard of living of retired people that matters to them rather than the level of the basic state pension. We have seen a tremendous growth in occupational coverage and in the income from savings of retired people, which have contributed substantially to their prosperity.
The hon. Member for Newport, West also went on to claim that the changes that we had made in statutory sick ply would somehow damage the prospects of the disabled and those with poor health records. All those allegations were made when statutory sick pay was introduced. None of them has turned out to be true, and I do not for one moment believe that the changes that we have made now will have that result.
I refer now to the hon. Member for Oldham, West. It is a debating point—I freely confess it to him before I make it—but he said that we had never had debates on the distribution of wealth and so on at the right time. We had an Opposition Supply day last week, when we had the chance of a proper debate. I do not know which part of the Opposition was responsible for managing to waste most of the day on discussions about identity cards for football supporters rather than—[Interruption.] We know what was going on among the Opposition——

Mr. Meacher: It is a bit rich for the Minister of State to try to make a political point about debates on the distribution of income and wealth. When we had an opportunity last week, what did the Government do? They spent 50 minutes on a footling statement on hill farming when there was nothing of any significance to debate—[Interruption.]—and then took 20 minutes on points of order to prevent my hon. Friend the Member for Livingston (Mr. Cook) from introducing a ten-minute Bill.

Mr. Scott: I detect a certain amount of agitation among hon. Members who have hill farmers in their constituencies, about the very proper contributions made on that issue. It was up to the Opposition business managers to decide how the remaining time was distributed, and they preferred to spend it debating identity cards rather than poverty, the subject that they had chosen for their earlier debate.
It is quite untrue that fewer resources are going into social security now than 10 years ago when we came to office, as the hon. Member for Oldham, West said. In 1978–79 social security took 9·5 per cent. of the gross domestic product; in the current financial year it is taking 10·2 per cent. of gross domestic product. As a percentage of public expenditure, which in many ways is a better guide to the priority given by successive Governments to social security over other matters, it has risen from 25 per cent. in 1978–79 to over 30 per cent. at present. It is therefore wrong to portray this as a reduction in the priority that we give to social security.
On inclusive rents, referred to by the hon. Member for Oldham, West, I hope that landlords will take account of the introduction of the community charge and the abolition of rates and reduce their rents. But it would be

living in cloud cuckoo land to imagine that one could legislate to force the rents down in such a complicated area of housing, where there are inclusive rents and where many contracts entered into are not even signed but are simply verbal agreements to pay a particular rent. Many housing experts have agreed that that would be totally unworkable.
The hon. Member for Oldham, West might like to try it, but he would end up reducing the resources available for rent assistance to claimants on social security or housing benefit. That would be the inevitable outcome of the hon. Gentleman's attempts to trample into this area with his boots on. Our interest is in making sure that those claimants are able still to pay the rents to which they are committed not to damage the claimants at all. That has been our first priority.
The hon. Member for Oldham, West went on to say that we have somehow broken our promise over the compensation for community charge. That is absolutely wrong, and the figures that the hon. Gentleman gave are totally wrong. Income-related benefits were adjusted at the last uprating in April 1989 to include help towards the 20 per cent. contribution that income support beneficiaries will have to make. The amounts included £1·15 a week for single people of 18 to 24, £1·30 for single people of 25 and over and £2·30 for couples, and the amounts will be uprated from April as part of the overall benefit levels. The amounts included in benefit levels will be more than adequate to meet the average 20 per cent. contribution, if local authorities are able to keep their expenditure within appropriate levels—one of the main reasons for introducing the community charge in the first place.
The hon. Member for Oldham, West made great play of what he called the joker in the disability package—that is to say, that we would be stopping entitlement to increases in additional pension for purposes of invalidity benefit once the Social Security Bill had gone through. That is a sensible measure, for more than one reason. It will improve the balance of benefits between those who are in and out of work in the longer term. I believe that we were right in our disability package to try to shift the balance so that those who are disabled early in life or from birth have a more equitable provision of benefit compared with those who have enjoyed a whole working life and have been able to build up savings, contributory benefits and occupational pensions as a result.

Ms. Short: The Minister has taken from the elderly disabled to give to the young disabled.

Mr. Scott: I do not agree: I think that the balance is right. In the longer term, the savings which may accure from this measure might give my successors—I suppose I have to say—greater room for manoeuvre in negotiating improvements and in increasing benefits in the future. The hon. Member for Oldham, West, however, could not bring himself to admit that, even with the change that we propose in the legislation, the cost of additional pension will rise from £450 million now to over £1·3 billion by the turn of the century.
I have been unable to address several points made in the debate but I undertake, as I usually do, to read the debate in the Official Report—although I have listened to almost all of it—and to take careful account of all the contributions made. I simply add that Opposition Members ought to be more realistic in their attitude. It is all too easy for them to come up with recipes and


prescriptions for spending more money; the fact is that when in government they were never able to produce the necessary resources.
From the low base that we inherited when we took office in 1979, this country's economic performance has been transformed and an increasing share of the resources, both of public expenditure and of gross domestic product, have been spent on those who need it most. It is a record of which we can be proud and which would never have been achieved by the Opposition.

Question put and agreed to.

Resolved,
That the draft Social Security (Contributions) (Re-rating) Order 1990, which was laid before this House on 18th January, be approved.

Resolved,
That the draft Social Security Benefits Up-rating Order 1990, which was laid before this House on 18th January, be approved.—[Mr. Newton.]

TERMS AND CONDITIONS OF EMPLOYMENT

Motion made, and Question put,
That the draft Statutory Sick Pay (Rate of Payment) Regulations 1990, which were laid before this House on 18th January, be approved.—[Mr. Newton.]

The House divided: Ayes 285, Noes 222.

Division No. 68]
[7 pm


AYES


Adley, Robert
Carlisle, Kenneth (Lincoln)


Aitken, Jonathan
Carrington, Matthew


Alexander, Richard
Chapman, Sydney


Alison, Rt Hon Michael
Clark, Sir W. (Croydon S)


Allason, Rupert
Colvin, Michael


Amery, Rt Hon Julian
Coombs, Anthony (Wyre F'rest)


Amess, David
Coombs, Simon (Swindon)


Amos, Alan
Cormack, Patrick


Arbuthnot, James
Couchman, James


Arnold, Jacques (Gravesham)
Cran, James


Arnold, Tom (Hazel Grove)
Critchley, Julian


Ashby, David
Curry, David


Atkins, Robert
Davies, Q. (Stamf'd amp; Spald'g)


Atkinson, David
Davis, David (Boothferry)


Baker, Rt Hon K. (Mole Valley)
Day, Stephen


Baker, Nicholas (Dorset N)
Devlin, Tim


Baldry, Tony
Dorrell, Stephen


Banks, Robert (Harrogate)
Douglas-Hamilton, Lord James


Batiste, Spencer
Durant, Tony


Beaumont-Dark, Anthony
Dykes, Hugh


Bellingham, Henry
Emery, Sir Peter


Bendall, Vivian
Evans, David (Welwyn Hatf'd)


Benyon, W.
Evennett, David


Blaker, Rt Hon Sir Peter
Fairbairn, Sir Nicholas


Body, Sir Richard
Favell, Tony


Boscawen, Hon Robert
Fenner, Dame Peggy


Boswell, Tim
Field, Barry (Isle of Wight)


Bottomley, Peter
Finsberg, Sir Geoffrey


Bottomley, Mrs Virginia
Fishburn, John Dudley


Bowden, A (Brighton K'pto'n)
Fookes, Dame Janet


Bowden, Gerald (Dulwich)
Forman, Nigel


Bowis, John
Forsyth, Michael (Stirling)


Boyson, Rt Hon Dr Sir Rhodes
Forth, Eric


Braine, Rt Hon Sir Bernard
Franks, Cecil


Brandon-Bravo, Martin
Freeman, Roger


Brooke, Rt Hon Peter
French, Douglas


Brown, Michael (Brigg amp; Cl't's)
Fry, Peter


Browne, John (Winchester)
Gale, Roger


Bruce, Ian (Dorset South)
Gardiner, George


Buchanan-Smith, Rt Hon Alick
Garel-Jones, Tristan


Buck, Sir Antony
Gill, Christopher


Budgen, Nicholas
Glyn, Dr Sir Alan


Burt, Alistair
Goodhart, Sir Philip


Butcher, John
Goodlad, Alastair


Butler, Chris
Goodson-Wickes, Dr Charles


Butterfill, John
Gorman, Mrs Teresa


Carlisle, John, (Luton N)
Gorst, John




NOES


Abbott, Ms Diane
Cunningham, Dr John


Allen, Graham
Dalyell, Tarn


Alton, David
Darling, Alistair


Anderson, Donald
Davies, Rt Hon Denzil (Llanelli)


Archer, Rt Hon Peter
Davies, Ron (Caerphilly)


Armstrong, Hilary
Davis, Terry (B'ham Hodge H'l)


Ashdown, Rt Hon Paddy
Dewar, Donald


Ashton, Joe
Dixon, Don


Banks, Tony (Newham NW)
Dobson, Frank


Barnes, Harry (Derbyshire NE)
Doran, Frank


Barron, Kevin
Douglas, Dick


Battle, John
Duffy, A. E. P.


Beckett, Margaret
Dunnachie, Jimmy


Beggs, Roy
Dunwoody, Hon Mrs Gwyneth


Beith, A. J.
Eastham, Ken


Bell, Stuart
Ewing, Harry (Falkirk E)


Benn, Rt Hon Tony
Fatchett, Derek


Bennett, A. F. (D'nfn amp; R'dish)
Faulds, Andrew


Bermingham, Gerald
Fearn, Ronald


Bidwell, Sydney
Field, Frank (Birkenhead)


Blair, Tony
Fields, Terry (L'pool B G'n)


Blunkett, David
Fisher, Mark


Boateng, Paul
Flannery, Martin


Boyes, Roland
Flynn, Paul


Bradley, Keith
Foot, Rt Hon Michael


Bray, Dr Jeremy
Forsythe, Clifford (Antrim S)


Brown, Gordon (D'mline E)
Foster, Derek


Brown, Nicholas (Newcastle E)
Fraser, John


Buchan, Norman
Fyfe, Maria


Buckley, George J.
Galloway, George


Caborn, Richard
Garrett, John (Norwich South)


Callaghan, Jim
Garrett, Ted (Wallsend)


Campbell, Menzies (Fife NE)
George, Bruce


Campbell, Ron (Blyth Valley)
Gilbert, Rt Hon Dr John


Campbell-Savours, D. N.
Godman, Dr Norman A.


Canavan, Dennis
Golding, Mrs Llin


Carlile, Alex (Mont'g)
Gordon, Mildred


Cartwright, John
Gould, Bryan


Clark, Dr David (S Shields)
Graham, Thomas


Clarke, Tom (Monklands W)
Griffiths, Nigel (Edinburgh S)


Clay, Bob
Griffiths, Win (Bridgend)


Clelland, David
Grocott, Bruce


Cohen, Harry
Hardy, Peter


Coleman, Donald
Hattersley, Rt Hon Roy


Corbett, Robin
Healey, Rt Hon Denis


Corbyn, Jeremy
Heffer, Eric S.


Cousins, Jim
Henderson, Doug


Cox, Tom
Hinchliffe, David


Crowther, Stan
Hoey, Ms Kate (Vauxhall)


Cryer, Bob
Hogg, N. (C'nauld amp; Kilsyth)


Cummings, John
Home Robertson, John


Cunliffe, Lawrence
Hood, Jimmy

Gow, Ian
Maude, Hon Francis


Grant, Sir Anthony (CambsSW)
Maxwell-Hyslop, Robin


Greenway, Harry (Eating N)
Meyer, Sir Anthony


Greenway, John (Ryedale)
Miller, Sir Hal


Gregory, Conal
Mills, lain


Griffiths, Peter (Portsmouth N)
Mitchell, Andrew (Gedling)


Grist, Ian
Mitchell, Sir David


Ground, Patrick
Moate, Roger


Grylls, Michael
Monro, Sir Hector


Hague, William
Montgomery, Sir Fergus


Hamilton, Hon Archie (Epsom)
Morris, M (N'hampton S)


Hamilton, Neil (Tatton)
Morrison, Sir Charles


Hampson, Dr Keith
Moss, Malcolm


Hanley, Jeremy
Mudd, David


Hannam,John
Neale, Gerrard


Hargreaves, A. (B'ham H'll Gr')
Nelson, Anthony


Hargreaves, Ken (Hyndburn)
Newton, Rt Hon Tony


Harris, David
Nicholls, Patrick


Hawkins, Christopher
Nicholson, David (Taunton)


Hayes, Jerry
Nicholson, Emma (Devon West)


Hayward, Robert
Norris, Steve


Heathcoat-Amory, David
Onslow, Rt Hon Cranley


Heseltine, Rt Hon Michael
Oppenheim, Phillip


Hicks, Mrs Maureen (Wolv' NE)
Page, Richard


Hicks, Robert (Cornwall SE)
Paice, James


Higgins, Rt Hon Terence L.
Parkinson, Rt Hon Cecil


Hill, James
Patnick, Irvine


Hind, Kenneth
Patten, Rt Hon Chris (Bath)


Hogg, Hon Douglas (Gr'th'm)
Patten, Rt Hon John


Holt, Richard
Pattie, Rt Hon Sir Geoffrey


Howard, Rt Hon Michael
Pawsey, James


Howarth, Alan (Strat'd-on-A)
Porter, David (Waveney)


Howell, Rt Hon David (G'dford)
Portillo, Michael


Howell, Ralph (North Norfolk)
Powell, William (Corby)


Hughes, Robert G. (Harrow W)
Price, Sir David


Hunt, Sir John (Ravensbourne)
Redwood, John


Hunter, Andrew
Renton, Rt Hon Tim


Irvine, Michael
Rhodes James, Robert


Irving, Sir Charles
Ridley, Rt Hon Nicholas


Jack, Michael
Ridsdale, Sir Julian


Janman, Tim
Rifkind, Rt Hon Malcolm


Jessel, Toby
Roberts, Wyn (Conwy)


Johnson Smith, Sir Geoffrey
Roe, Mrs Marion


Jones, Gwilym (Cardiff N)
Rossi, Sir Hugh


Jones, Robert B (Herts W)
Rost, Peter


Jopling, Rt Hon Michael
Rowe, Andrew


Kellett-Bowman, Dame Elaine
Ryder, Richard


Key, Robert
Sackville, Hon Tom


King, Roger (B'ham N'thfield)
Sayeed, Jonathan


King, Rt Hon Tom (Bridgwater)
Scott, Rt Hon Nicholas


Knapman, Roger
Shaw, David (Dover)


Knight, Greg (Derby North)
Shaw, Sir Giles (Pudsey)


Knight, Dame Jill (Edgbaston)
Shaw, Sir Michael (Scarb')


Knowles, Michael
Shelton, Sir William


Knox, David
Shephard, Mrs G. (Norfolk SW)


Lamont, Rt Hon Norman
Shepherd, Richard (Aldridge)


Latham, Michael
Shersby, Michael


Lawrence, Ivan
Sims, Roger


Lawson, Rt Hon Nigel
Skeet, Sir Trevor


Leigh, Edward (Gainsbor'gh)
Smith, Sir Dudley (Warwick)


Lennox-Boyd, Hon Mark
Smith, Tim (Beaconsfield)


Lilley, Peter
Speller, Tony


Lloyd, Sir Ian (Havant)
Spicer, Sir Jim (Dorset W)


Lloyd, Peter (Fareham)
Squire, Robin


Lord, Michael
Stanbrook, Ivor


Luce, Rt Hon Richard
Stanley, Rt Hon Sir John


Lyell, Rt Hon Sir Nicholas
Steen, Anthony


Macfarlane, Sir Neil
Stem, Michael


MacKay, Andrew (E Berkshire)
Stevens, Lewis


Maclean, David
Stewart, Allan (Eastwood)


McLoughlin, Patrick
Stewart, Andy (Sherwood)


McNair-Wilson, Sir Michael
Stewart, Rt Hon Ian (Herts N)


McNair-Wilson, Sir Patrick
Stradling Thomas, Sir John


Madel, David
Sumberg, David


Malins, Humfrey
Summerson, Hugo


Maples, John
Taylor, Ian (Esher)


Marland, Paul
Taylor, Teddy (S'end E)


Marshall, John (Hendon S)
Temple-Morris, Peter


Marshall, Michael (Arundel)
Thompson, D. (Calder Valley)


Martin, David (Portsmouth S)
Thompson, Patrick (Norwich N)

Thorne, Neil
Warren, Kenneth


Thornton, Malcolm
Watts, John


Townend, John (Bridlington)
Wells, Bowen


Townsend, Cyril D. (B'heath)
Wheeler, Sir John


Tracey, Richard
Whitney, Ray


Tredinnick, David
Widdecombe, Ann


Trippier, David
Wiggin, Jerry


Trotter, Neville
Wilkinson, John


Twinn, Dr Ian
Wilshire, David


Vaughan, Sir Gerard
Wolfson, Mark


Viggers, Peter
Woodcock, Dr. Mike


Wakeham, Rt Hon John
Yeo, Tim


Walden, George
Young, Sir George (Acton)


Walker, Bill (Vside North)



Waller, Gary
Tellers for the Ayes:


Walters, Sir Dennis
Mr. Michael Fallon and


Ward, John
Mr. John M. Taylor.


Wardle, Charles (Bexhill)

Howarth, George (Knowsley N)
Patchett, Terry


Howell, Rt Hon D. (S'heath)
Pendry, Tom


Howells, Geraint
Pike, Peter L.


Howells, Dr. Kim (Pontypridd)
Powell, Ray (Ogmore)


Hoyle, Doug
Primarolo, Dawn


Hughes, John (Coventry NE)
Quin, Ms Joyce


Hughes, Roy (Newport E)
Randall, Stuart


Hughes, Simon (Southwark)
Redmond, Martin


Illsley, Eric
Rees, Rt Hon Merlyn


Ingram, Adam
Richardson, Jo


Janner, Greville
Robinson, Geoffrey


Johnston, Sir Russell
Rooker, Jeff


Kaufman, Rt Hon Gerald
Ross, Ernie (Dundee W)


Kilfedder, James
Ross, William (Londonderry E)


Kirkwood, Archy
Rowlands, Ted


Lambie, David
Ruddock, Joan


Lamond, James
Sedgemore, Brian


Leadbitter, Ted
Sheerman, Barry


Leighton, Ron
Sheldon, Rt Hon Robert


Lestor, Joan (Eccles)
Shore, Rt Hon Peter


Lewis, Terry
Short, Clare


Litherland, Robert
Sillars, Jim


Livingstone, Ken
Skinner, Dennis


Livsey, Richard
Smith, Andrew (Oxford E)


Lloyd, Tony (Stretford)
Smyth, Rev Martin (Belfast S)


Lofthouse, Geoffrey
Snape, Peter


Loyden, Eddie
Soley, Clive


McAllion, John
Spearing, Nigel


McAvoy, Thomas
Steel, Rt Hon Sir David


McCartney, Ian
Steinberg, Gerry


McFall, John
Stott, Roger


McKay, Allen (Barnsley West)
Strang, Gavin


McKelvey, William
Straw, Jack


McLeish, Henry
Taylor, Mrs Ann (Dewsbury)


McWilliam, John
Taylor, Rt Hon J. D. (S'ford)


Madden, Max
Taylor, Matthew (Truro)


Maginnis, Ken
Thomas, Dr Dafydd Elis


Mahon, Mrs Alice
Thompson, Jack (Wansbeck)


Marshall, Jim (Leicester S)
Turner, Dennis


Martin, Michael J. (Springburn)
Vaz, Keith


Martlew, Eric
Wall, Pat


Maxton, John
Wallace, James


Meacher, Michael
Walley, Joan


Meale, Alan
Wardell, Gareth (Gower)


Michael, Alun
Wareing, Robert N.


Michie, Bill (Sheffield Heeley)
Watson, Mike (Glasgow, C)


Michie, Mrs Ray (Arg'l amp; Bute)
Welsh, Andrew (Angus E)


Mitchell, Austin (G't Grimsby)
Welsh, Michael (Doncaster N)


Molyneaux, Rt Hon James
Williams, Rt Hon Alan


Moonie, Dr Lewis
Williams, Alan W. (Carm'then)


Morgan, Rhodri
Wilson, Brian


Morley, Elliot
Winnick, David


Morris, Rt Hon A. (W'shawe)
Wise, Mrs Audrey


Mowlam, Marjorie
Worthington, Tony


Mullin, Chris
Wray, Jimmy


Murphy, Paul
Young, David (Bolton SE)


Nellist, Dave



Oakes, Rt Hon Gordon
Tellers for the Noes:


O'Brien, William
Mr. Frank Haynes, and


O'Neill, Martin
Mr. Martyn Jones.


Parry, Robert

Question accordingly agreed to.

It being after Seven o 'clock, MADAM DEPUTY SPEAKER proceeded, pursuant to the Order [5 February], to put forthwith the Question on the motion relating to pensions.

Resolved,
That the draft Guaranteed Minimum Pensions Increase Order 1990, which was laid before this House on 18th January, be approved.—[Mr. Newton.]

Social Security

The Minister for Social Security (Mr. Nicholas Scott): I beg to move,
That the draft Social Security (Industrial Injuries) (Regular Employment) Regulations 1990, which were laid before this House on 18th January, be approved.

Madam Deputy Speaker (Miss Betty Boothroyd): It will be for the convenience of the House to debate this motion together with the following motions:
That the draft Social Security (Recoupment) Regulations 1990, which were laid before this House on 25th January, be approved.
That an humble Address be presented to Her Majesty, praying that the Income Support (Transitional) Amendment No. 2 Regulations 1989 (S.I., 1989, No. 2340), dated 12th December 1989, a copy of which was laid before this House on 13th December, be annulled.
That an humble Address be presented to Her Majesty, praying that the Social Fund Cold Weather Payments (General) Amendment Regulations 1989 (S.I., 1989, No. 2388), dated 19th December 1989, a copy of which was laid before this House on 19th December, be annulled.
That an humble Address be presented to Her Majesty, praying that the Social Security (Industrial Injuries and Diseases) Miscellaneous Provisions (Amendment) Regulations 1990 (S.I., 1990, No. 73), dated 22nd January 1990, a copy of which was laid before this House on 23rd January, be annulled.

Mr. Scott: The House has before it two affirmative instruments—the draft Social Security (Recoupment) Regulations 1990 and the draft Social Security (Industrial Injuries) (Regular Employment) Regulations 1990. There are also three negative instruments: the Social Security (Industrial Injuries and Diseases) Miscellaneous Provisions (Amendment) Regulations 1990, the Social Fund Cold Weather Payments (General) Amendment Regulations 1989 and the Income Support (Transitional) Amendment No. 2 Regulations 1989.
I shall deal first with the recoupment regulations. These stem from section 22 and schedule 4 of the Social Security Act 1989. That sets out the scheme by which the compensation paid for personal injury or disease will be reduced by an amount equivalent to benefit paid in respect of the same injury or disease. It will apply to compensation payments made from 3 September this year for injuries or diseases which occur on or after 1 January this year. The recovery scheme will replace the present offsetting rules which have grown up over the past 40 years and which I think were regarded by most commentators as ripe for reform.
Broadly speaking, at present either one half or the whole of benefits paid over five years, or longer in some cases, is deducted from the compensation payment and used to reduce the compensator's liability to compensate the injured person. Therefore, in effect state benefits have been subsidising compensation liability.
The new legislation is based on two fundamental principles—that compensation should not be subsidised in this way but that compensators should meet their full liability and, secondly, that the injured person should not receive more from two sources than he could have received from one. The scheme provides that the compensation payment will be reduced by payment of any of the benefits listed in regulation 2 of the draft regulations which have been paid for the same injury or disease. The deduction

will be in respect only of what has been paid up to the date when the compensation claim is finally settled or five years if that is earlier.
Some 80 per cent. of claims are settled within two and a half years and we expect that the majority of injured people will see no difference whatever or may get more than under the existing rules. The difference will be that the amount formerly retained by the compensator, usually an insurance company, will in future be repaid to the Department. I emphasise that we are not taking away benefit entitlement any more than the current offsetting provisions do. It is the compensation payment that is reduced in either case.
The regulations are affirmative because of the list of benefits and the lower limit of compensation above which recovery will apply. Some hon. Members may remember our discussions last year in Committee, when I set out what the relevant benefits would be. They are listed in regulation 2. They are broadly the same range of benefits to which offsetting currently applies, and are those which the victim of an injury or disease may claim in respect of incapacity, disability or inability to work.
I shall now deal with the small payment limit in regulation 3. The level of £2,500 was announced on 21 December in reply to a question by my hon. Friend the Member for Hereford (Mr. Shepherd). The limit results from a recommendation to us by Touche Ross that in 1987 about 36 per cent. of settlements were at £1,500 or below, and represented about £2 million-worth of benefits. We accepted then that it would make sense to exclude small payments to avoid the paperwork with which insurers and ourselves would have to deal for a relatively modest amount of benefit revenue.
We provided that these small payments would continue to be subject to the existing system, which is 50 per cent. offsetting over five years. That serves a dual purpose. It ensures that injured people are treated in roughly the same way as they are now with some reduction in compensation, and provides some relief to insurance companies in the additional costs that they incur as a result of the new scheme in general. The £2,500 figure is a 60 per cent. increase on the original £1,500 and we estimate that it will obviate the need to deal with about 37 per cent. of all settlements. At the same time, insurers will retain about £2 million to offset their costs.
The other regulations are largely administrative details which have been worked out by officials in consultation with the private sector, whose co-operation we greatly appreciated. We have tried to place the minimum burden on them, to take their advice very carefully, and to take account of the procedures that are used already in the insurance industry.
I turn now to the draft Social Security (Industrial Injuries) (Regular Employment) Regulations 1990. The House will recall that last October the Government removed the pensioners' earnings rule. I think that that step was widely welcomed. As a result of that decision, these regulations, which I commend to the House as wholly beneficial, help to clarify the likely entitlement to reduced earnings allowance of people who either are approaching or are over pensionable age. Reduced earnings allowance is payable when earnings are lost as a result of an industrial accident or disease, and since April 1989, when a person reaches pensionable age and retires from regular employment, reduced earnings allowance is


replaced by retirement allowance. That is payable at 25 per cent. of the rate of the reduced earnings allowance paid at the date of retirement.
Since October 1989, when the abolition of the pensioners' earnings rule took place, those who continue to work past normal pensionable age, and indeed those who previously retired and then decided to return to regular employment, have been able to retain or regain REA. However, regulations are needed to define "regular employment" for the purposes of these entitlements. I believe that the regulations themselves prescribe quite generously the condition of being in regular employment.
Basically, when pension age is imminent, or when someone has retired and decides to return to regular employment and wishes to claim reduced earnings allowance, the adjudication officer will have to be satisfied that the person works, on average, 10 hours a week over a five-week period in order to qualify. Anybody getting reduced earnings allowance while incapable of work, or while unemployed as a result of industrial injury, will be treated as being in regular employment. These regulations are wholly beneficial, and I commend them to the House.
I want to turn now to the instruments that are subject to negative resolution. Regulation 13 of the Social Security (Industrial Injuries and Diseases) Miscellaneous Provisions (Amendment) Regulations 1990 has been around for some time. I see at least one Opposition Member poised on the edge of his seat as I come to this matter. Originally the regulations were to have been laid at the end of October, but, following representations from some Opposition Members, I withdrew them temporarily to give time for further consideration and, in practice, to provide time for the possible revocation of the regulations to be publicised.
A very large number of applications under this regulation have been received by the Department in the intervening period. I hope that, whatever complaints hon. Members may have about the ultimate revocation, they will recognise that I acted in a way that was helpful, both in practice and in theory.

Dr. Norman A. Godman: I am obliged to the Minister for showing his usual courtesy in giving way.
May I ask him to confirm that any letter concerning a backdated claim for disablement benefit, no matter how rudimentary, will be accepted by officers of the Department of Social Services up to closure of the Department's offices on Monday next? Can he confirm that people living in areas remote from DSS offices will also have their letters of application for such benefits considered if those letters are posted before the evening of next Monday?

Mr. Scott: I can agree with the hon. Gentleman's first proposition. I shall ask my hon. Friend the Parliamentary Under-Secretary of State, who will reply to the debate, to clarify whether the latter proposition can be acceded to. The hon. Gentleman will no doubt accept that in this area, I have tried to be as helpful as possible. Perhaps I should clear up one possible misapprehension. It is not true that from the relevant date there will be no further applications

under regulation 13. I think that the hon. Gentleman understands that, but it has been suggested that, somehow, the whole operation is being revoked.
The position is simply that any applications received after that date will be treated under the new rules that were introduced in 1986, rather than under the previous rules. Broadly, those cases where it is judged that less than 14 per cent. disability arises from the injury or disease will not be allowed, whereas those in which it is judged that the disability is over 14 per cent. will be allowed. I think that that reflects the intention that help should be concentrated on those who need it.
As I have indicated, regulation 13 was introduced on 1 October 1986 as a transitional measure to help people who suffered an industrial accident or the onset of a prescribed industrial disease before 1 October, but did not claim disablement benefit until after that date. The intention was quite clear: that those people incapable, by physical or mental disability, to make their claims before 1 October 1986 should be safeguarded. But a tribunal of commissioners widened the scope of the intention by asserting that "incapable" could encompass justifiable ignorance that a claim to disablement benefit could be made. But since that commissioners' decision became known—and I suspended the earlier amending regulation at the end of October—a very substantial number of claims have been made.

Mr. Eddie Loyden: Does the Minister recognise that, in Merseyside alone, about 5,000 applications were made during the period of the relaxation? Does he agree that 14 per cent., which is the cut-off point, represents a very high proportion of disability, not only in this field but generally? Will he take that into account when he is considering the whole question of the cut-off point for industrial benefit?

Mr. Scott: I cannot give an undertaking to reconsider the 14 per cent. cut-off point. This was a sensible rationalisation of the system introduced in 1986, and, four years later, it would take an awful lot to persuade me to reconsider it. If the hon. Gentleman wants to make any representations we shall take account of them, but I do not think that I could consider going in the opposite direction. Of course, the decision was made before I became a Minister in this Department, but I have considered it carefully in the context of my discussions with hon. Members who came to see me, and I certainly do not think that there is a case for resiling from it. It is now about three years since the transitional regulation came into force, and it is about time we revoked it.
I want to turn now to the Social Fund Cold Weather Payments (General) Amendment Regulations 1989. The main purpose of the regulations, which I hope will be welcomed, is to enable elderly people who are receiving income support to qualify for cold weather payments whilst retaining up to £1,000 of their savings. The capital limit is increased from £500, with effect from 1 January 1990. This is the increase in the amount of capital to be disregarded that was announced by my right hon. Friend the Secretary of State on 25 October. It will apply to help from the rest of the social fund for the elderly, except crisis loans, from April this year.
These regulations apply to the cold weather payments and are operable from 1 January. This set of regulations will enable more elderly people to obtain help with the


extra cost of heating their homes at times of very cold weather. In addition, the regulations put it beyond doubt that a partner's capital is to be treated as the claimant's, as is the practice throughout the social fund, as well as in respect of income support. There are minor amendments to the description of areas linked to certain weather stations necessitated by the closure of Oakhampton station, and to rectify defects that the Joint Committee on Statutory Instruments identified in the original set of regulations.
I am slightly surprised that Opposition Members should be seeking to have the Income Support (Transitional) Amendment No. 2 Regulations 1989 annulled. These regulations are wholly beneficial. It may be that hon. Members, simply want the opportunity to have a canter round the course, rather than that they seriously want the regulations to be annulled.
Before outlining the impovement, and the reason for it, I should like to remind the House of the transitional protection arrangements. I think that all hon. Members are well aware of the fact that we reformed all the income-related benefits—income support, family credit, and housing benefit—in April 1988. Also, of course, community charge rebates have been introduced since then. Our aim, in reforming the system, is to provide so far as possible, a sound common basis for all the benefits affected.
To do this, we had to get rid of the complexities of the old supplementary benefit schemes, such as additional requirements, which had grown up piecemeal since the end of the second world war, and the introduction of national assistance, as it was called then, in 1948. That was no easy task. We achieved our aim through a modern system of personal allowances and premiums, which has targeted help more effectively on those in greatest need. Inevitably, with such a major change in approach, some people fared better than others. Therefore, we introduced transitional protection to ensure that such claimants did not suffer a drop in the cash that they had coming into their households.
Our declared intention was to provide a temporary cushion at the point of change, which deflates as claimants' new entitlement catches up with the old one, or their circumstances change. All this was spelt out in the White Paper on the reform of social security as long ago as 1985. Nevertheless, we have made some special exceptions to the general rule for the most vulnerable. For example, we recognised the exceptional needs of severely disabled people in two ways. First, we provided special transitional protection for those who had to pay high charges for domestic assistance. This special protection has been, and is being, increased in line with inflation each year. Secondly, we ensured that increases in benefit arising from spells in certain types of respite care do not reduce protection either.
The amendment regulations before the House further demonstrates our willingness to respond to difficult situations. By these regulations, we shall be helping families with children in the care of the local authority. Hon. Members will be aware that such children very often return home for weekend leave or their holidays, and we should all want to encourage this continued link with family life.

Mr. Patrick Thompson: Will my right hon. Friend spell out—if he cannot do so now, perhaps my

hon. Friend the Under-Secretary will do it later—the significance of the eight week period in the amendment regulations and what would happen to a family if a child returned from care and then remained at home and would no longer qualify for this relief?

Mr. Scott: The object of these amendments is not to affect what would happen if a child returned to the family home for a long period and then had to be taken back into care. It is to take account of a child going home for a weekend or being taken away for a holiday, which is still the proper subject of the transitional protection arrangements. I want to ensure that it is possible for children to go back to their own homes or to go on holiday for short periods, but not to undermine the fundamental principles. I accept that at the moment such families could lose transitional protection, which is unfair and could discourage families from having children on home leave. In these regulations, we have taken steps, which I hope that the House will applaud, to remove that disincentive.

Ms. Clare Short: We are discussing a batch of social security regulations that are part of the Government's ever continuing programme to redistribute income from those with least to those with more. I have quoted the figures to the House before, but I intend to continue to do so until every hon. Member and, I hope, many more people outside understand what the Government have been doing. I hope also to correct the false impression given by the Minister for Social Security in his winding-up speech in the previous debate.
John Hills has written a book called "Changing Tax: How the Tax System Works and How to Change it" in which he looks at the system over the past 10 years. If we take the old tax and benefit system and see where it would be if everything had been uprated in line with economic growth and compare it with what we have now, we find that those in the bottom 60 per cent. of the income distribution have lost, while those in the top 30 per cent., especially in the top 10 per cent., have gained. The losses to those in the bottom 50 per cent. average out at nearly £8·50 per family. Anyone in that category who feels hard up should be made aware that it is because the Government have taken £8·50 from him.
On the other hand, the top 10 per cent. have gained nearly £40 per family. Overall, those in the bottom half of the population have lost £6·6 billion, of which £5·6 billion has gone to those in the top 10 per cent. Indeed, £4·8 billion has gone to those in the top 5 per cent. That is the reality, and it is important to keep pointing out that reality so that we do not have speeches from those on the Government Benches who pretend to care, who pretend to be concerned about the groups in our society who find it difficult to make ends meet, and who pretend that social conditions are not much more unequal than they have been for a long time.
The Minister admitted as much a moment ago. He said that he thought that greater inequality meant greater economic growth. It is funny that the Government are boasting about economic growth when the economy is in such serious difficulties, with high inflation and a dreadful balance of payments, and when we are heading into a recession, as everybody understands. What the Minister was saying was that homeless young people on the streets


and pensioners who have managed for years but now find it difficult, produce economic growth. That is morally unacceptable and economically untrue.

Mr. Michael Jack: I have listened carefully to the hon. Lady's line of argument. Is not the greatest scourge to all social security benefits the robber baron—inflation? Will she comment about the effects of inflation during the last Labour Government on the value of a whole range of benefits?

Ms. Short: It is interesting that Tory Members want to draw attention to inflation. The incompetence of the previous Chancellor—now happily gone and being paid far too much elsewhere—led to a big growth in inflation. Compared with the average in Europe, ours is a poor performance. We have to compare the performance of the last Labour Government with the OECD average for inflation, when inflation was high across the world because of the effects of American spending in the Vietnam war.
Inflation is a serious problem, which erodes the value of benefits if they are not updated. It is serious because the Government have used it to erode the value of the income of many people. It is an example of the Government's failure in economic policy and the failure of their policy of using inequality to create economic growth. Instead of producing economic growth, it has produced more and more inequality.
This weekend I was approached in my advice bureau by two 17-year-old girls, both of whom were working and both of whom were homeless. I have not had that experience before, but I am having difficulty in helping them because the Government's benefit changes have resulted in the closure of many hostels that used to provide for such people. I was also approached by two young mothers—competent and able women—who cannot manage to buy enough food for their children and heat their hard-to-heat houses.
I was approached by a number of pensioners who told membercontribution—I have had this experience time and again—"I can't understand it, Clare. I've managed for years and now I can't manage. Surely there is something wrong with my benefits as I don't seem to be able to pay all my bills and find the money I need." That is the result of the Government deliberately cutting the value of the state pension and making poorer those who are dependent on that state pension.
We are continuing that process tonight in this the 15th richest country. It is unforgivable and uncivilised that so many people are having such a struggle every week to live decently. The regulations are more bad news for those who are sick or cold or have been injured at work. They are part of the continuing erosion of civilised standards.
I shall deal with the instruments in the order that they are set out on the Order Paper. The first needs little debate and is not contentious. As I understand it, the Government are correcting the law to reflect current practice, as there is a loophole in the law, to allow somebody between the ages of 60 and 65 in regular employment to retain reduced earnings allowance. We support that, but we should note that the Government have recently announced that they are to abolish reduced

earnings allowance for all new claimants, so although there is a tiny bit of generosity here, they are planning a big dollop of cuts in incomes a little later.
The draft Social Security (Recoupment) Regulations 1990 are designed to implement the provisions of the Social Security Act 1989 to take back from anyone who has received compensation for an accident or injury at work up to 100 per cent. of that compensation. Since 1948, the Government have had power to take back up to 50 per cent. of such compensation.

Mr. Scott: That is not true. They can take back 50 per cent. of some benefits but up to 100 per cent. of others. A patchwork arrangement has been built up over the years. We are seeking to have a common rule.

Ms. Short: I think the Minister misguides the House when he suggests that the Government are not increasing the proportion of compensation that they can take back. What they propose is a contentious move, and those who served in Committee on the 1989 Act recall that the Government were honest enough to make it clear that everyone they had consulted about the change was opposed to it.
The consequence of the change is that there will be further delays for victims of accidents and industrial injuries receiving compensation. Money will be clawed back from compensation given for things other than loss of income—for pain, hurt and suffering—in lieu of benefits paid by the state to make up for loss of income. The regulations implement that unfair and unpopular move. The Government are cutting benefit payments at the expense of those who have suffered serious accidents or injuries at work.

Mr. Scott: It is not true to say that what is proposed will damage the interests of those who have been compensated. What we are doing at the moment is, in effect, allowing insurance companies to reduce the amount of money that they pay to claimants because of the benefits that they are being paid. We are anxious to make sure that the claimant will not suffer and that those who accept the contract for insurance should pay the full amount of money and not shift some of that burden on to the state. That is the principle behind it.

Ms. Short: My understanding is different from that of the Minister's and I shall be grateful if the right hon. Gentleman will tell me if I am wrong. He and I served on the Committee which considered the relevent measure. The Government are taking power to take back money—to make up for income paid out in state benefit by way of basic family income credit, unemployment benefit, income support or whatever the case might be—from compensation paid, even if part of the compensation is given not for loss of income but for pain, hurt or suffering. We, and most people, believe that it is wrong for the Government to take power to do that, and that is one of the major reasons why we are objecting to the regulations.
The Minister is right to say that we do not object to the Income Support (Transitional) Amdt. No. 2 Regulations 1989. We accept that it is a good idea that families who have had children taken into care should have those children back to stay. I agree with the hon. Member for Norwich, North (Mr. Thompson) that it is sad that they


can have them for only up to eight weeks and that, should they have them for longer than that, they will lose their transitional protection.
It is shocking that special exemption must be made in such a case. The whole provision for transitional protection mislead the public and hid the vicious cuts that were introduced under the last re-organisation of social security benefits. The truth is that the Government could not bear the idea of individuals suddenly seeing a massive cut in their benefits. They knew that such awareness would be deeply unpopular and would make people angry.
So while they said that nobody would lose in cash, they knew that, with the passage of time, inflation would erode the value of the transitional protection and that people would become poorer. That is happening and that is why many pensioners are hurting, for with the passage of time the value of the transitional protection has diminished, their incomes are lower and they are finding it difficult to manage.

Mr. Patrick Thompson: The hon. Lady has failed to explain why the Opposition are seeking to annul the regulations which will benefit families by up to £10 a week.

Ms. Short: Had the hon. Gentleman been listening to the Minister, he would have heard the answer to that question. The right hon. Gentleman said that he thought it unlikely that we would oppose the regulations, but appreciated that we wished to discuss the question of transitional arrangements and to criticise the fact that such provision was necessary. I am doing that now, and the hon. Gentleman will note later the way in which we vote on this issue. The regulations themselves are not objectionable, but the need for them reveals an objectionable feature in the way in which the Government made provision for transitional protection, when they were cutting benefits.
The Social Fund Cold Weather Payments (General) Amendment Regulations 1989 slightly modify a wholly unacceptable scheme of providing help to people on very low incomes in times of extremely cold weather. The Minister explained that they allowed for a capital limit of £1,000 instead of £500. In the past, some poor pensioners who had saved more than £500 for their funerals could not apply for help, to the tune of £5 a week, when it was severely cold in their areas.
We need to set the proposed improvement in the context of what has been happening in help for heating costs to people on low incomes. The organisation Neighbourhood Energy Action has a fine record of work in this sphere. It points out that the figure of £5 a week has remained at the same level since its introduction at the end of 1986. So inflation has been eroding the value of that payment to those who are poor and who need extra help because the weather is severely cold.
Neighbourhood Energy Action also points out that the system of payment is wrong. It claims that the payment should be made automatically to all income support claimants, which would obviate the need for people to make individual claims and would avoid money being wasted on advertising campaigns and so on. It would mean that women such as the two who came to my advice bureau, who live in bad housing that is hard to heat, would receive some help, whereas at present they receive none.
Before April 1988, supplementary benefit claimants received more than £400 million a year by way of

additional payments for heating. That was in addition to severe weather payments. That £400 million was supposedly absorbed into income support premiums. That meant that help that had been directed at specific problems—cold homes, expensive heating systems and so on—was lost.
The result is that many people living in badly built and poorly insulated homes are having to spend on heating money that was meant for their children's food. The alternative for them is to allow their children to be cold. The cold weather payments system is an outrage and must be changed. The minor change that we have before us is, of course, acceptable, but it is not good enough, and that is the basis of our case.
The Social Security (Industrial Injuries and Diseases) Miscellaneous Provisions (Amendment) Regulations 1990 represent a further cut in benefit for people injured at work. It comes on top of the previous cut to which I referred. In 1986, the Government abolished compensation for those whose injuries had a less than 14 per cent. disability determination and who previously received a lump sum. It had also been provided that, if one failed to claim before the cut-off date—before the benefit was abolished—because one was misled by the DSS or was ignorant of one's rights, one could claim.
In December 1986, Mr. Kenneth Potts successfully claimed under that provision. He was awarded compensation for contracting vibration white finger disease, which was recognised only in 1985 as an industrial disease. He had left his job in the shipyard in 1980 having no knowledge, of course, of the availability of the benefit.
The Government were furious. They appealed to the Tribunal of Commissions in August 1989, and lost. Now we witness the Government's respect for the rule of law. The law went against them, so now they are changing the law so that others in Mr. Potts' position will not benefit in future. We should also note that those with an injury causing more than 14 per cent. disability who had the capacity to receive a reduced earnings allowance will lose that entitlement under the current social security legislation.

Mr. Jack Thompson: Is my hon. Friend aware that we in the mining industry have a dual problem? Not only are we losing benefits, but there is an increase in the rate of serious injuries caused by new production methods and a reduction in manpower.

Ms. Short: I appreciate the point that my hon. Friend makes A cynical package has recently been announced that is meant to give the impression of increasing benefits for people with disabilities. Announcements about such matters are made by the Government every few days in the hope of proving that what is, in fact, a paltry package is a big improvement for people with disabilities. It has partly been paid for by cuts in benefits. People injured at work who in the past could claim reduced earnings allowance will in future lose that right in order that other deserving people with disabilities, who of course need help, can receive something. It is not right that one group of disabled people should pay for the benefits of other groups of disabled people.
The package represents another series of sordid little cuts and unfair provisions from a Government that is busy still, at this late stage and even given their current level of popularity, to redistribute money from those with less to


those with more. That is making our country more unfair and more unequal. The Labour party opposes that—and so do the British people, who are showing more and more their deep concern at Britain becoming an increasingly divided, unequal, unfair, and economically inefficient society. We look forward to the return of a Labour Government and to values of fairness and reasonableness, to protect people who are old, sick or cold in the decent way that the British people would like to see them protected.

Sir George Young: I was amazed by the speech of the hon. Member for Birmingham, Ladywood (Ms. Short), who described the measures before the House as "another series of sordid little cuts" that was part of some package of promoting inequality. She tried to link the orders to a broader debate about the redistribution of wealth. However, having listened to the measures being described by my right hon. Friend the Secretary of State, and having examined them myself, I find that they contain some relatively minor but useful social reforms. Many of them will help claimants, some are neutral, and one of them does reduce benefits but in a way that was trailed four years ago, when transitional provisions were introduced. To link the measures before the House tonight with some so-called grandiose and sinister package is incredible.
I believe that the hon. Member for Ladywood misunderstood the recoupment provisions. My right hon. Friend clearly said that he is not taking away any benefit entitlement. Instead of the insurance company pocketing the recoupment, it will be returned to the taxpayer, which is neutral so far as the beneficiary is concerned. I do not comprehend how any responsible right hon. or hon. Member could object to that change.

Ms. Short: I was listening, and I served on the Committee on the Social Security Bill 1986 that introduced the powers being implemented by regulations. There is no dispute between us that claimants should not be paid twice, and that if they have received a state payment for loss of income, the insurance payment for loss of income should balance it out. However, the Government are taking the power to claw back money that is paid as compensation for pain, injury and hurt, to make up for the payment of unemployment benefit, family credit or income support. We believe that that is wrong.

Sir George Young: We can all read Hansard tomorrow, but my understanding of my right hon. Friend's remarks is that he is not taking away benefit entitlement any more than the existing offset provisions do. The compensation payment is reduced in each case. My right hon. Friend went on to explain that the money pocketed by insurance companies will be returned to the taxpayer. I see nothing objectionable in that arrangement, which is neutral so far as the claimant is concerned.
The hon. Member for Ladywood did not mention the 60 per cent. increase in the small payments limit—a useful reform that might have found a place in her speech. As to cold weather payments, she did not mention the useful

increase from £500 to £1,000 in the capital disregard, which I hope signals more general examination by the Government of the whole question of capital cut-offs.
The removal of any disincentive to a child returning home for the summer holidays is also to be welcomed. However, in the light of the intervention by my hon. Friend the Member for Norwich, North (Mr. Thompson), it will be helpful if my hon. Friend the Under-Secretary of State for Social Security will explain, when she winds up, what would be the financial implications for child benefit entitlement, for example, if a child remained at home. One could then think through the consequences if what was originally planed as an eight-week visit transpired to be the prelude to the child returning home permanently.
All right hon. and hon. Members must surely accept that, unless transitional arrangements are eventually brought to an end, there can never be a move to the new structure. We all remember the debates of two years ago when the new scheme was introduced, when argument centred not so much on structure but on the level of benefits and the transitional arrangements. If one argues against transitional arrangements being phased out, the logical consequence is that the new structure will never be introduced.
I happen to believe that the new structure is better and fairer. Transitional arrangements must be truly transitional, and those right hon. and hon. Members who supported their introduction did so in the acceptance that, as benefits moved up, those of people enjoying transitional protection would stand still until they in turn benefited from general upratings.
I find no difficulty in supporting the package, but I find it impossible to relate the measures before the House to the rather emotional speech by the hon. Member for Ladywood.

Mr. Bob Clay: In speaking mainly on the revocation of regulation 13, I want to make it clear that in no way do I make light of the other squalid and appalling cuts that the regulations impose, but that I have a particular constituency interest in regulation 13.
It is generally acknowledged that most of the people who will be disadvantaged by the revocation of regulation 13 are those suffering from vibration white finger. I trust that Conservative Members in particular do not imagine that vibration white finger is some sort of minor technical disability. Even in its early stages, it can cause numbness, leading to a considerable loss of facility and of ability to work in particular trades. It can lead also to the end of participation in a number of social or cultural activities. A darts player, for example, may no longer be able to throw darts, and a pianist will be unable to play. I shall not go through all the condition's ghastly stages, but eventually it can cause, through gangrene, the loss of the use of the hand, or something worse.
Very often, the level of disability exceeds 14 per cent. When the Minister says that the new arrangement will deny people whose disability is determined at less than 14 per cent. the right to a payment, in fact he is talking about well over 90 per cent. of people suffering from vibration white finger.
The Secretary of State referred to the decision of the commissioner in respect of my constituent, Kenneth Potts, which he said widened the law. That is an interesting


concept. The law is the law. Initially, it was not the commissioner but the social security appeal tribunal that found in favour of Mr. Potts, and it did not widen the law but merely interpreted it. Its decision was upheld by the commissioner, who also interpreted the law. It is wrong for the Government to regard that decision as a widening of the law and now to put a stop to that benefit, simply because many more people would be entitled to claim it.
It is worth considering why the commissioner concluded that Mr. Potts—and, now, many thousands of others—have good cause to make late claims. It has been established that vibration white finger did not become a classified industrial disease until 1985. Not a great deal of time elapsed between then and 1 October 1986, when the Social Security Act 1986 took effect.
This case illuminates two wider aspects of Government policy. First, if one decimates every industry—shipyards, coal mining, heavy engineering—which cause this disease, the people who worked in them are scattered to the winds. There was a community of information in which shop stewards, health and safety representatives and others could go around and say, "By the way, Ken, that vibration white finger that you already claimed for, or maybe you were told not to bother because it was not a prescribed industrial disease, is now a prescribed industrial disease." But the ability to do that in the workplace is limited if the workplace has gone or been significantly reduced.
Some of the people displaced from the workplace because of redundancies or closures have taken the advice of the right hon. Member for Chingford (Mr. Tebbit) and got on their bike. They are now working somewhere else, where they do not have mates who will say, "By the way. did you know that vibration white finger is now a prescribed industrial disease?" There is very good reason, as the commissioner found, for them not to have heard the good news that they could now claim
Secondly, there is the Government's attitude towards trade unions. People affected by the disease are most likely to find out that the law has changed through their trade union. I do not think that we would expect to find the Government publishing notices in the press, warning all trade union members that if they do not regularly attend trade union branch meetings, they might miss out on information to their benefit. But that is precisely what has happened in this case.
Members of the GMB, the Amalgamated Union of Engineering Workers, or the National Union of Mineworkers, who were regularly in contact with and active in their trade unions found out that they could now claim for vibration white finger. Workers who had been scattered by the four winds, had become apathetic or had found it difficult to keep in touch with the trade union, particularly while they were unemployed, did not find out. The Government, who are so hostile to trade unions, are taking advantage of the fact that it is more and more difficult for trade unions to carry out the job of communication. But if the information had been communicated more effectively, with Government assistance, it might not have meant that so many people had good cause, as the commissioner found, to make a late claim. That is the position now—we have a large number of late claims.
In one social security office in my constituency—Dunn house—in early January there were already 1,500 requests

to review old cases and 2,000 new claims. That number will have increased significantly by tonight, and will no doubt continue to increase until a week on Monday.
The Government cannot have it both ways. If they find that there are an alarmingly large number of claims, surely they have to accept that that means that a significant number of people had good reason for not claiming and, in justice, since it is therefore a widespread and serious problem, they should not revoke the regulation and they should allow more late claims. If the claims are coming in by the thousand now, they will not all be dealt with by the cut-off point; indeed, they will not all have been made by that date.
If the Government take the view that most people who have good cause to claim will now have done so, and only a handful of peculiar cases are left, why do they revoke the regulation? Surely there is no problem. If they are expecting only a handful more claims after a week on Monday, they could leave the regulation and allow all the time in the world for the few remaining claims to come in. After all, this case is a closed universe, because those who started suffering from vibration white finger since 1986 are in a different position. In this instance we are talking only about people who developed the disease before 1 October 1986, and that is a limited number. The Government ought to accept that.
It comes down to this—I think that this is an illustration of what my hon. Friend the Member for Birmingham, Ladywood (Ms. Short) said earlier. What is the point of the regulations and what is the point of the social security system? Is it to provide justice for people who are genuinely entitled to it, or is it to provide an obstacle race, in which the best-informed, the cleverest and the most persistent finally get over the obstacles and win? If the Government deny that it is the latter, and say that the purpose of the system is to provide justice for those entitled to it, the fact that there are now thousands of claimants with this disability ought to lead the Government to say that they will not put another obstacle in their way, as they have already suffered enough.
Many of the late claimants have suffered because they have been made redundant, and they have had to change their place of work and move their home. They have suffered many times over, and now they suffer the final insult of an unnecessary cut-off date.
I repeat that the Government cannot have it both ways. Justice means that all those who have vibration white finger, or any other disease that became a prescribed industrial disease at a later date, ought to be able to claim, provided that they can show good cause, in line with the commissioner's decision.
If the Government are trying to limit claims because of the amount of money, why do they revoke the regulation now, when it will not cost very much and they might as well leave things as they are?
I genuinely cannot make my mind up why the Government are doing this. I attended a meeting with the Minister last October with some of my hon. Friends. We were told that this policy had nothing to do with the commissioner's decision in the Potts case. It was only a temporary regulation to allow fairly late claims after 1 October. The Government had meant to revoke the regulation earlier, but they had somehow overlooked it, and now they were tidying up. I think that the Minister may have said that if it was causing a lot of problems, they would reconsider and give people a few months more.
That is one interpretation of what happened, but it did not have anything to do with the commissioner's decision. However, what the Minister said tonight implied that it had something to do with the commissioner's decision, because it widened the law. I have already disputed that. The Minister said in a rather horrified manner that it had produced thousands of claimants, and had cost a lot of money, and the implication was that the Government would revoke the regulation for that reason. The Minister should tell us which interpretation is correct. Whichever it is, it is unsatisfactory.
If the Government are admitting to stopping claims because many people are claiming, it is a complete contradiction of what the social security system should be about. On the other hand, if it is genuinely a tidying-up measure that they were going to take anyway, they should recognise that thousands of people have been caught out by the change, and they should allow more time for those people to claim, since there are a limited number of people left who can claim.
Whatever the explanation, the Government should say that this change is stupid, unnecessary, cruel and vindictive, and they should not revoke regulation 13.

Several hon. Members: rose—

Mr. Deputy Speaker (Mr. Harold Walker): Order. It seems that the debate is over-subscribed, but with some self-restraint all round, all hon. Members may be able to speak.

Mr. Andrew Mitchell: Before dealing specifically with the two affirmative instruments and the three negative instruments which we are debating, I shall make a few general comments on the Government's record on social security uprating and on their priorities in this important matter. But before I do that, I shall comment on the speech by the hon. Member for Birmingham, Ladywood (Ms. Short), for whom I have a great respect, not least because she once attended the House at 4.30 in the morning when I was moving an important Adjournment debate on Nottinghamshire. She took part in that debate.
The hon. Lady describes our record as one of squalid cuts. I and other Conservative Members cannot recognise that description. It is simply not true. I do not want to bandy statistics with the hon. Lady because, as she will agree, that is not sensible. However, this year we are spending £1 billion a week on social security, there has been a 36 per cent. real increase in the past 10 years and cash benefits for long-term sick and disabled people have doubled in real terms since 1979.
I am quite content to agree with the hon. Lady that there is still an awful lot more to be done about these matters, but she should at least give credit where it is due and agree that the Government have prioritised some of these issues and done a great deal to help.

Ms. Short: One reason for the increase in spending is that unemployment is still higher than it was when the Government came to power. Secondly, we have more of an elderly population than we used to have. The hon. Gentleman should also know that the Government have been in power 10 years and that roughly every 20 years the

income available in Britain doubles. The income of people in the same position as the hon. Gentleman will have increased significantly because of the general economic growth we have experienced every year since the second world war, if not before. Those in greatest need—the old, the sick and so on—are becoming relatively worse and worse off and are not sharing in the benefits of general economic growth. To say that there has been some growth in spending does not answer my fundamental point.

Mr. Mitchell: I do not accept the hon. Lady's last point, although I have some sympathy with her first two. The Government's record on this matter is good. The hon. Lady should pay credit where it is due and acknowledge that in those important matters, the Government have prioritised expenditure. I do not wish to make a particularly party political point, but the Government's record is a great deal better than that which the last Labour Government achieved. I entirely accept that they had aspirations, but they were not able to deliver the economic goods to meet them.
Two of the Government's most important priorities should be to tackle the problem facing the disabled and give aid and support to those coping with long-term sickness. The hon. Lady mentioned child benefit. That is not an easy issue to deal with, but we should at least accept that it would have been ludicrous to increase child benefit last year. To do so would have helped people like me with young families who are not prime candidates for it. It would not have helped those who most need it. The extra help that we have been able to give this year means that 1·5 million families and 3 million children, who would not have gained from an increase in child benefit, have benefited. It is important to recognise that.
The hon. Lady also mentioned pensions. Perhaps we could do more for pensioners. I believe that we could. The Government have honoured their electoral pledge. There are five new measures that will benefit pensioners from this April. For example, 200,000 elderly and disabled people living in residential care and nursing homes will benefit from an increase of £10 in their weekly benefit limit. That is important.
Last year, I and many of my hon. Friends argued strongly that the poorer pensioners' package should be brought forward. That proposal has been implemented and will do a lot to help those people who are least well off. The hon. Lady should welcome that and I regret that she did not do so in her speech.
Much is changing in the pension world. By the time that I retire there will be a different picture for pensioners from that which now exists. It will then be much easier to help those who are least well off and those who fall through the net.
The hon. Lady hinted at a comparison between British pensions and those paid overseas; to do so is beguiling, but wrong. The only countries with a universal state pension are the United Kingdom, Ireland and Denmark. Only the United Kingdom provides separate pensions for wives who have not worked. The Labour party omit the part which occupational pension schemes play in British pensioners' total income when they produce the figures. Above all means-tested benefits in this country for elderly people are among the best in Europe.
About a year ago an interesting comment was made by the president of Pensioners' Voice, Mrs. Dorothy Rhodes——

Mr. Paul Flynn: rose—

Mr. Mitchell: I shall just finish my point.
My hon. Friend the Member for Taunton (Mr. Nicholson) has already made this point but it bears repetition. Mrs. Dorothy Rhodes said:
We have talked about percentages of pensions in Europe, and I have been one who has spoken loudly in support of parity with Europe, but during the past year I have been to Pensioners Congresses in Italy and Greece and, having spoken at length to those who actually receive the Euro pensions [sic] and discovered that in many cases the actual cash received in relation to the cost of living is often lower than in the UK, I am revising my opinion; for in no way can our Federation ask for an equality that would disadvantage our own people.
If that lady is revising her opinion, just possibly the hon. Member for Ladywood might consider revising hers.

Mr. Flynn: Opposition Members who have been here since 5 o'clock are getting vivid feelings of déjà vu. The hon. Member for Taunton (Mr. Nicholson) made not only the point but the hon. Gentleman's entire speech and to avoid my answering the speech again it might be useful if the hon. Gentleman returned to a speech of his own.

Mr. Mitchell: All that demonstrates is that my hon. Friend the Member for Taunton is a wise man who, like me, makes important points which the hon. Member for Newport, West (Mr. Flynn) should bear in mind. When I read that quote—it is quite clear that the hon. Gentleman did not like it—I said that the point might have already been made by my hon. Friend, but was important enough to bear repeating.

Mr. David Nicholson: The Opposition do not like it.

Mr. Mitchell: As my hon. Friend says, the Labour party do not like it when we make the facts clear.
I particularly welcome a number of changes in this year's social security upratings, some of which fall wider than the regulations, but are extremely important. I am particularly pleased that the disability premium for families with disabled children who are also on income-related benefit has been increased. That will give extra help to 20,000 families, which is extremely important.
The carers' premium, which has been introduced into income support for those receiving invalid care allowance of £10 per week is also important and will help 30,000 carers. I am pleased that mobility allowance will be extended to deaf and blind people. That is worth £26·25 more per week to 3,000 people.

Mr. Jimmy Dunnachie: The hon. Gentleman is in the wrong debate.

Mr. Mitchell: The hon. Gentleman says that I am in the wrong debate, but these are important matters to do with this year's upratings.
The overdue changes in attendance allowance are particularly welcome. More money will be made available to terminally ill people without the normal six-month waiting period. That will help 50,000 people by anything up to £37·55 a week and is extremely important.
This year's measures, over and above the normal uprating, will reach 500,000 seriously ill disabled people and carers.

Ms. Short: On a point of order, Mr. Deputy Speaker. I do not want to be unfair to the hon. Gentleman, but his speech is completely out of order. We are debating a number of regulations to which he is not referring. He appears to be discussing issues that were before the House before the vote at 7 o'clock.

Mr. Deputy Speaker: I must confess that I find it difficult to follow where we are with so many different and complex regulations before us. I am sure that the whole House finds this difficulty, but I hope that the hon. Gentleman will make it clear to which of the regulations he is referring.

Mr. Mitchell: I am grateful to you, Mr. Deputy Speaker, for reminding me of that. I am dealing with an overview of many of the regulations——

Mr. Deputy Speaker: Order. I am sorry, but although there is a temptation to have a general debate, the hon. Gentleman must relate his remarks to the specific regulations before the House.

Mr. Mitchell: I am again grateful, Mr. Deputy Speaker.
I shall turn to a number of specific aspects of the regulations the first of which is the Social Fund Cold Weather Payments (General) Amdt. Regulations 1989. The Government deserve credit for that for two reasons: first, for bringing forward the date to 1 January. It must have been tempting for social security Ministers to save it until later but they did not do so. Secondly, they deserve credit for doubling the capital limit to £1,000. That was much needed, and I am glad that it has been done. My hon. Friend the Minister might consider going further with this matter next year and I hope that she will listen to Help the Aged and to the local authorities to find out whether anything else could be done to improve the operation of the scheme.
Secondly, it is right to reform the recoupment regulations. My hon. Friend the Member for Ealing, Acton (Sir G. Young) made a fair point when he said that it is wrong for state benefits to subsidise compensation that is paid out by insurance companies under valid insurance policies. We should act as guardians of the taxpayer and ensure that sums which are lost to the taxpayer are recouped. The insurance companies should pay out. Thirdly, my right hon. Friend the Minister of State said that the private sector was consulted about the administrative details. That is long overdue and unusual. The business community often says that it is not consulted. I am glad that it was consulted on this occasion.
Fourthly, I greatly welcome the help for families whose children are in care but who return home for the weekend and for holidays. I have some sympathy with the hon. Member for Birmingham, Ladywood, (Ms. Short) on this and I hope that the Minister will deal with the point. We must provide direct support for families united in this way. I am very pleased that additional funds will be provided through income support for children who return home for holidays and at the weekend.
Finally, if a new system is introduced, which I believe will be both fairer and better than the old one, there must be transitional arrangements, but at some point they must be brought to an end, I welcome that aspect, too. I strongly support the Government tonight and I am grateful to you, Mr. Deputy Speaker, for allowing me to take part in the debate on these regulations.

Mr. Eddie Loyden: I want to refer to regulation 13, which was so ably spoken to by my hon. Friend the Member for Sunderland, North (Mr. Clay). We welcomed the extension of the transitional period. However, since then, it has become clear that vibration white finger is now found in industries where it was not previously considered a problem. We have to thank welfare rights officers for having drawn to our attention the fact that so many people suffer from the disease.
All Governments have overlooked the fact that when people start work they will, in almost all cases, be putting their health, or even their life, at risk. Most workers are completely unaware of the dangers of working in certain industries. Mine workers suffer from pneumoconiosis and emphysema and building workers suffer from asbestosis, while workers in shipbuilding, ship repairing and other industries suffer accidents, and workers in the chemical and rubber industries suffer from carcinoma of the bladder. Workers suffer from many other diseases simply because they work in certain industries.
The Government should allow them to claim benefit for industrial diseases. Workers have difficulty in establishing their right to benefit. It is difficult for them to prove that their disease was caused by their working environment. In its heyday, Merseyside employed 24,000 workers in the shipbuilding and ship repair industries, but that number has long since been cut. No doubt my hon. Friend the Member for Birkenhead (Mr. Field) will confirm that there are only about 1,000 workers in those industries.

Mr. Frank Field: About 2,500.

Mr. Loyden: There is no comparison between that figure and the 24,000 workers who previously worked in the shipbuilding and ship repairing industries. Many of them are now out of contact with various organisations, in particular the trade unions, who could give them advice.
The Government spent a large amount of money on television advertising when they decided to privatise certain industries. It is shameful, therefore, that the Department of Social Security has not spent money on television advertisements so that workers might know about their right to industrial and other benefits. It would be inappropriate to end the transitional period; many people still do not know about their right to benefit. The scheme ought to go further.

Mr. Clay: Before my hon. Friend leaves the point about Government publicity, will he confirm that I am right in believing that in the case of vibration white finger, which became a prescribed industrial disease in 1985, the Government provided no publicity whatsoever about its having become a prescribed industrial disease? Despite that fact, they want to revoke legislation that would permit late claims, with good cause, to be made for industrial benefit.

Mr. Loyden: That is a very important point. I hope that the Minister will take it on board.
The magic figure of 14 per cent. excludes many people from benefit. I do not accuse the Minister of conspiring to set that figure, but civil servants have probably said that such a figure would preclude many thousands of people from claiming benefit. There is evidence that industrial disease and injury figures are set at a certain level in order to exclude genuine cases of industrial disease and injury

which can result in disability and even death. The Opposition are very concerned about that, as well as about industrial disease and accidents throughout industry. I emphasise the point made by my hon. Friend the Member for Sunderland, North that the transitional period ought not to be revoked, so that people with a rightful claim can claim benefit.

Mr. Lewis Stevens: The hon. Members for Liverpool, Garston (Mr. Loyden) and for Sunderland, North (Mr. Clay) offered reasonable points of view on why the Opposition wanted to debate these regulations. Difficulties always arise when people come forward to claim for industrial injuries, but the first decisions were taken in 1986 and there must be a cut-off at some point. It is not unreasonable to implement it now.
The hon. Member for Garston said that these people had been given a considerable extension of time and were grateful for that—

Mr. Loyden: I said "a brief period".

Mr. Stevens: I apologise.
The Government have been reasonable. It is true that, when people leave industries, their trade unions have more difficulty in tracing them and they have problems finding their unions again, but the vast majority of people have had a good chance to claim.
The hon. Member for Sunderland, North asked whether social security was designed to give people their just entitlement or whether it was an obstacle around which only those who were clever and persistent enough could get. When we debated the Social Security Act 1986, it was clearly the Government's intention to simplify an extremely complex system which lent itself precisely to those who could work the system and thus come off better than those who went through the routine procedures only to end up in an unsatisfactory position. The new system is more simplified and easier to understand.

Ms. Short: The new system has replaced a system that the hon. Gentleman describes as complex but which I would say provided for need. The new system is meaner.

Mr. Stevens: That is exactly what I would expect the hon. Lady to say. Hers is the attitude that the Opposition displayed throughout the passage of the 1986 Act and ever since. Whenever the Government try to help specific groups of people, the Opposition say that they are wrong or not doing enough. When in government, the Opposition never even contemplated directly helping some of these groups, but they ignore that completely.
The hon. Member for Oldham, West (Mr. Meacher) started from the premise that we should have stuck to a link with pay. The hon. Member for Birmingham, Ladywood (Ms. Short) took the same line when working out what she called cuts. If the Opposition had been in government for the past 10 years, they would not have had the slightest chance of maintaining the link. They messed up the situation when in government. They needed economic growth to be able to put the money into the benefit system. As my hon. Friends have said, this Government can put £1 billion a week into the system, and have spent it on, for example, the disabled. The mobility allowance is now claimed by six times as many people as before, and that is a significant difference.
Whatever the Government do, the Opposition always say it is not enough, but they would not generate the economic growth to do as much themselves. They want to cut—

Mr. Patrick Thompson: Surely my hon. Friend recalls that the last time the Opposition formed the Government they had to go to the International Monetary Fund for money, and they made cuts the like of which we have not seen since and hope never to see again.

Mr. Stevens: My hon. Friend is absolutely right. Earlier, the hon. Member for Ladywood said that the Government cut taxes, so the money did not go to the Exchequer. She should have attended some of our Treasury debates. We cut some of the high rates of tax, and that increased the money coming into the Treasury, which could then be spent on social security and so on.
The Opposition are guilty of a strange contradiction over the recoupment regulations. As I understand it, the system did not disadvantage people who were recipients; the money was taken from the insurance companies. It is rare to find the Opposition supporting the insurance and financial sector, yet here they are, dedicated to saving insurance companies money.

Ms. Short: It is not good enough to put false propositions before the House and to seek to mislead people in the country. We all agree that if people are compensated for loss of income with a state benefit the insurance money should be paid to the state. But the Government have wrongly taken power to take money paid to people not for the loss of income but for pain and suffering—to recoup state benefits.

Mr. Stevens: That is what the hon. Lady said before, but it does not alter the fact that the insurance companies should pay. They receive the premiums from companies and from people.
We welcome the raising of the capital ceiling for cold weather payments to £1,000. That is helpful. I also agree with my hon. Friend the Member for Norwich, North (Mr. Thompson), who said that young people visiting home should have no detrimental effect on the support that their parents receive. I, too, ask my hon. Friend the Under-Secretary to extend the eight-week period——

Ms. Short: Good for you—very brave.

Mr. Stevens: All the regulations are evidence that the changes that the Government have made to improve the social security system have generally been in favour of individuals and groups. I only wish that the Opposition would look more kindly on the upratings announced earlier; they were good news for people. The Opposition, however, take delight in trying to squash the good news and degrade what is being provided. That suggests that they do not care about the people who receive social security and are more interested in making political points at the expense of the Government. They may always say that they want more, but they should at least give credit to the Government for what they have done for those most in need.

Mr. David Winnick: I want to put the hon. Member for Nuneaton (Mr. Stevens) right on one point. The Opposition are certainly interested in those who

receive or should be receiving social security. We are passionately interested in trying to improve their lot, and time and again, in letters or in our regular surgeries, we come up against constituents who come to us for help and who live on the barest minimum incomes. I ask the hon. Gentleman to bear that in mind. No doubt Conservative Members will earn their brownie points from the Whips Office for coming here and trying to justify and defend the Government's social security policy.
I want to concentrate on the cold weather payments. As my hon. Friends will know, I have raised this matter in the House several times over the years. Pensioners on income support and those just above that level undoubtedly face immense difficulties in paying their fuel bills during the winter months. I remind the House of the increases in the price of gas and electricity. Between November 1979 and November 1989 the pensioners prices index rose by about 85 per cent. But gas went up by 127 per cent. in that time and electricity by 96 per cent. Moreover, fuel takes up a larger part of a pensioner's budget, as we all know.
In some respects, the fact that temperatures this year have not triggered off the cold weather payments illustrates my argument. It could be argued that, rather like last year, we are witnessing an ordinary British winter with some storms thrown in. However, temperatures have not reached freezing, so cold weather payments have not been made. But imagine what this House would be like if there were no heating on now. I am sure that every hon. Member ensures that his or her home is heated. It is not freezing, but some form of heating is necessary wherever we are, be it at work in the House of Commons, or in our private homes.
As a result of various comments that I have made in the local press, many of my constituents with small incomes, mainly pensioners but not entirely so, have complained to me bitterly about the rent that they pay. I raised the matter during social security questions on Monday when I gave as an illustration a constituent of mine with an income of £54 a week who, due to the substantial reduction in housing benefit, is paying £10 a week in rent. That is not due to the local authority; it is due purely to the Government's policy on substantially reducing housing benefit.

Mr. Loyden: Disgraceful.

Mr. Winnick: As my hon. Friend rightly says, to have an income of £54 a week and to pay £10 a week is disgraceful, but in addition to the cost of food and other daily essentials, money has to be found for fuel. Pensioners' fuel bills, after all, are like ours. There is no discount because they are pensioners. The Government may argue that the bills can be paid in weekly or monthly instalments—I accept that—but at the end of the day the same amount of money has to be paid and, as I have just said, during the past 10 years gas has gone up 127 per cent. and electricity 96 per cent. That is why the Opposition are deeply concerned about the poorest in our community, and certainly pensioners on the basic minimum, who clearly do not have sufficient income to heat their homes adequately.
I accept, of course, that the increase in the capital threshold from £500 to £1,000 for cold weather payments is a step in the right direction. We would not for one moment argue otherwise. Common sense ensures that that is right. But many conditions have to be met before the cold weather payment is made. The average temperature


has to fall to freezing point for seven consecutive days before the £5 a week is paid. Moreover, the discretionary social fund does not meet the cost of fuel consumption. It is no good the poorest pensioners on income support going along to the DSS office because they do not have sufficient funds and asking for help with winter fuel payments. By regulation, no additional help would be given.
Heating allowance ended when income support replaced supplementary benefit. Before the changes in April 1988, some £400 million a year was received in additional payments, quite apart from the cold weather payments. But that all ended when supplementary benefit went and income support came in. The Minister will argue, no doubt, that that sum of money has been duly absorbed in the income support premiums, but I doubt whether that is the case.
Pensioners have less income because the pension is no longer increased in line with earnings. We have already given the figures. As a result of the decision by the Government in 1980, a married pensioner will have lost £21 a week in April and a single pensioner £13 a week. That simply means less money to pay for fuel during the winter months.
Reference has been made in previous debates to the dangers of hypothermia and other cold-related diseases to the elderly in the winter months. Far more elderly people die during the winter months in Britain than in a number of other European countries. Undoubtedly, one reason must be the poverty that exists among so many of our elderly people for all the reasons that I have been explaining. We in Britian suffer from fuel poverty. Far too many of our elderly people simply do not have an income that is adequate to meet their fuel bills. Winter is a nightmare for so many of our elderly people.
Our constituents have done nothing wrong. They have simply not earned enough money during their working lives. They do not have much by way of an occupational pension, if any, and if they do, if they are council tenants, it is taken into account in housing benefit. It is wrong that those people should be penalised every winter in the manner that I have been describing.
Much more needs to be done. I would like £5 a week, which after all does not add up to much, to be paid during the winter months regardless of the temperature. Hon. Members should not forget that even if it is freezing, cold weather payments can be made only to those on income support. I have said it before and I do not care how many times I say it, and I shall go on doing so until the situation improves: we should be thoroughly ashamed that we allow our elderly people to suffer the poverty, discrimination and deprivation in the winter months that we do.
Conservative Members have a responsibility to put the kind of pressure on their Government that Opposition Members would be doing if a Labour Government were not carrying out the kind of policies that we would wish to see. There is no doubt about that; we have done it before. We would be putting pressure on a Labour Government. However, Conservative Members have come along tonight and made nice complacent speeches. I only wish that they could be more concerned with the poor pensioners who have to suffer the hardship that Conservative Members, and we ourselves, do not have to suffer.

Mr. Patrick Thompson: I am grateful for the opportunity to speak briefly in this important debate. I listened with interest to the remarks of the hon. Member for Walsall, North (Mr. Winnick). In my constituency also there is concern about elderly people who suffer from cold. That is why I pay tribute to the Government. They were the first Government to introduce severe weather payments some years ago. The least that the hon. Gentleman could have done was pay tribute to them for that. We can look at the details of the scheme, but once again it is a Conservative Government who have taken action and who have moved forward on cold weather payments.
I want to speak briefly on the Opposition's motion to annul the Income Support (Transitional) Amendment No. 2 Regulations 1989 which were laid before the House just before Christmas. It is important to set the whole question of the transitional arrangement in income support against the background of the Government's achievement in income support.
I was amazed that the hon. Member for Birmingham, Ladywood (Ms. Short), should challenge my hon. Friend the Member for Gedling (Mr. Mitchell), who rightly pointed to the fact that spending on social security under the Government has risen by 36 per cent. in real terms since 1979. She also challenged the correct assertion of my hon. Friend that we are now spending £1 billion a week on social security benefits.

Ms. Short: I did not challenge it.

Mr. Thompson: I remember the hon. Lady's exact words. She failed to recognise that it is only because of the economic growth and success under this Government that we have been able to increase payments to those levels.
Transitional arrangements protect people affected by the more efficient targeting of benefits. In my constituency in Norwich few people when they think about it challenge the Government's intention to target benefits where the need is greatest. That must be right, and it is one of the reasons why we are debating these regulations tonight. Total expenditure on income support will reach £7·7 billion this year.
I express amazement that the Opposition, led by the Leader of the Opposition, wish to annul a measure which will benefit families in my contituency by as much as £10 a week or more. The Opposition Front-Bench team is ill advised to put out the message in my constituency and elsewhere that the Opposition want to annul a measure which will provide such benefits.
The Government's record on support for the family is good. I shall use even more statistics to make my case, because they speak truths which cannot be refuted by Opposition Members. In 1990–91, the Government will spend almost £10 billion on the whole range of benefits for the family. That is an increase of 27 per cent. in real terms since 1979. In case the hon. Member for Ladywood and her colleagues have forgotten, it was their Government who cut such support by 7·3 per cent.
I do not wish to stray too far from the regulations. The Government's record on family support leaves the record of previous Labour Governments completely in the shade. The facts speak for themselves. With a little help from the Library, the staff of which I commend—I shall speak later about the complexity of the social security regulations and


be a little more controversial—I have found out that a family on income support of £50 a week may have a transitional addition of some £10 a week, making a total income of £60 a week.
We now come to the point of the transitional regulations. If the family have a child under the age of 11 in the care of a local authority who rejoins the household for a short period, the family's income support could be increased by some £11·75, leading to a total of £61·75. Under the unamended regulations, which would still apply if the Government had not taken the action that we are debating tonight, such a family in my constituency would receive only £1·75 extra to help with the child.
It must be right to introduce these regulations to bring back transitional support. I have read the regulations and with the help of expert advice I have got it right. The family will benefit by some £10.
I support the Government in laying the statutory instrument before the House. I repeat that I am amazed that the Opposition, led by the Leader of the Opposition, seek to annul such a measure. My constituents will find it difficult to understand the points that the hon. Lady made in defence of that position.
My second point is rather different. I should like to quote from the written evidence submitted to the Joint Committee on Statutory Instruments on this matter. I make no apology for reading it out in full:
Regulation 14(1) of the Transitional Regulations provides for the reduction of transitional additions. In particular regulations 14(1)(a) and 14(1)(d) provide for reduction in the additions by increases in the applicable amount. There is no provision in these Regulations for the increase or re-introduction of a transitional addition once it is reduced or lost.
In case you are wondering why I am reading this out, Mr. Deputy Speaker, the reason will become clear in the next paragraph.
The unintended consequence of the interaction of the provisions of regulation 16 of the General Regulations and regulation 14 of the Transitional Regulations is a loss in benefit to families whose children are in the care of the local authority if such children subsequently come home on leave.
I draw attention to the word "unintended". In the drafting of the regulations, it was not noticed that the effect would be a loss in benefit.
My last substantive point is that we do not have a satisfactory system for drafting social security regulations which are comprehensible to those who work closely in the system, never mind to Back-Bench Members of Parliament trying to debate them. That is amply illustrated by the statutory instrument.
My last quotation supports a campaign which I first initiated and supported in 1984, a campaign to get rid of gobbledegook in government and to move towards more comprehension, particularly of social security matters:
In regulation 14 of the Income Support (Transitional) Regulations 1987(b) (reduction and termination of transitional and personal expenses addition) after paragraph (1F) there shall be inserted the following paragraph—
'(1G) Notwithstanding paragraph (1)(a) or (d), where a claimant's applicable amount increases because a child or young person mentioned in paragraph (5)(c) of regulation 16 of the General Regulations (circumstances in which a person is treated or not treated as a member of the household) is treated as a member of the claimant's household under paragraph (6) of that regulation, the claimant's transitional addition shall not be reduced by the amount of that increase unless the child or young person has been treated as a member of the household for a continuous period which exceeds eight weeks'.".

I support the Government in their intentions and their measures. I support my hon. Friend the Member for Ealing, Acton (Sir G. Young), who ably supported the Government's record and their intentions.
Eventually we must do something about the language of drafting. I know that it is said that it is required for legal purposes, but that is not good enough. Other countries can do things better. When a Member of Parliament has to spend three hours in the Library to begin to understand the simplest statutory instrument, something is wrong. Therefore, I hope that I shall have all-party support in saying that we must work to remove gobbledegook and to increase understanding of our regulations.

8 pm

Mrs. Audrey Wise: You will be pleased to know, Mr. Deputy Speaker, not only that I intend to speak exactly to the terms of the debate and to the regulations, unlike most Conservative Members, but that I do not intend to waste a lot of time reading out the regulations from the papers in front of us.
So far as Conservative Members have dealt with the regulations at all, they have paid fulsome compliments to the Government for, as they have put it, "helping" families with children, with disabled relatives or with children in care when they come home for the weekend, as if the Government were giving those families something.
I shall quote just one line from the regulations, a sub-title that refers to
Amendment of regulation 14 of the Income Support (Transitional) Regulations 1987".
That means that, since the regulations came into force all that time ago, families with children in care who have come home for the weekend have been penalised. Although it took the Government until 14 December 1989 to remove that penalty, Conservative Members compliment their Front Bench on that dilatory action. Obviously, their expectations of their Government are low.
I congratulate my hon. Friend the Member for Sunderland, North (Mr. Clay) on his able speech on vibration white finger. I shall not repeat his comments, but I will repeat his challenge. If the regulation will not affect many people because most people have already been able to claim their benefit, why waste the time of the House in bringing it forward, and why cut from benefit the very few people who might be left? However, if the regulation will affect a great many people and save the Government a lot of money, it is grossly unjust. The provisions will mean that people who have been injured through their work—often because of the carelessness of their employers, in my opinion—are to be deprived of benefit. My hon. Friend's challenge needs to be dealt with.
We also face a clawback on some compensation payments. There was an interesting contradiction in what the Minister of State said. In his speech he said that claimants should not get more from two sources than they would have got from one. That makes it clear that claimants are being deprived of what he sees as an extra benefit. However, in an intervention, he told my hon. Friend the Member for Birmingham, Ladywood (Ms. Short) that the provisions were directed not against claimants, but against insurance companies. The right hon. Gentleman should remember what he said in his speech when intervening only a few minutes later. I hope that that will be clarified.
My hon. Friend the Member for Ladywood pointed out that the state will claw back money that has been given in compensation for pain and suffering. The Minister of State did not deny that. The state, which has felt no pain or suffering, is taking from people who have felt such pain and suffering the money to which they are entitled. The right hon. Gentleman expects us to believe that the provision is simply to ensure that insurance companies do not make too much profit.
I conclude by referring to the severe weather payments. As my hon. Friends have said, the statutory instrument is an improvement, but it is a meagre improvement. It would be foolish of us not to take the opportunity of this debate to show exactly how meagre it is. Eligibility for the benefit is still far too restrictive. Yes, the Government have brought the age limit down to 60 and have increased the capital threshold from £500 to £1,000. However, it is possible to be severely ill and still not qualify for the extra £5. A claimant must either be chronically sick and in receipt of a benefit or have been sick for at least 28 weeks. That means that a person can suffer a severe or dangerous illness and yet not meet the eligibility requirement for this meagre benefit. In addition, the Government have retained the £5 claim limit that has existed since 1986, thus allowing the benefit to wither.
The Government have also retained the same silly way of measuring whether claims can be made. People who do not live near weather stations might suffer severe weather—and even meet the ridiculous stipulation about seven days at freezing point—but because they do not live near a weather station, their weather may not be recorded and they cannot claim.
The Government have also retained the system whereby people have to make a claim. They need to know that the weather station has recorded seven consecutive days of "freezing point" weather and that they will therefore be eligible. How many people would know that? It is within the competence of the Department of Social Security to pay the benefit automatically. The Department is keen on talking about efficiency. This would be a way of demonstrating it.
In all, we are justified in regarding such improvements as are contained in the regulations as completely inadequate and meagre, and the cuts as mean-spirited in the extreme.

Several Hon. Members: rose——

Mr. Deputy Speaker: Order. If hon. Members follow the example of the hon. Lady and take no longer than seven minutes, the four hon. Members who have been waiting patiently for a long time will get in.

Mr. Michael Jack: The speech by my neighbour, the hon. Member for Preston (Mrs. Wise), and other Opposition speeches highlight a problem for the Opposition in debating social security. They are long on advice but short on ideas as to how we might have a workable social security system, sufficiently resourced. That point was made amply by my hon. Friend the Member for Gedling (Mr. Mitchell).
One fact that seems not to have been made clear by Opposition Members is that the Social Security

(Recoupment) Regulations will add £55 million to the social security budget. We have heard a lot from the Opposition about how we will pay for the improvements which the various regulations bring into force. Here is £55 million, but there was not a word of praise from the Opposition for the Government's courage in producing the regulations.
I am concerned about how the recoupment regulations will operate. I am worried about the complexity of the regulations which appear to take away something. The public may worry that their entitlement to a range of benefits listed in the regulations will be denied them. When people talk to me in my advice bureau about how the social security system works, they are worried about the principle that a person cannot be compensated twice for the same type of claim. I seek from my hon. Friend the Under-Secretary of State reassurance that the Department will address the question of communication with potential claimants.
I am also concerned about how insurance companies may react to the implementation of the regulations. I seek reassurance from my hon. Friend that insurance companies will not try to minimise compensation, particularly in out-of-court settlements, so as to reduce their liability to recompense the Department of Social Security. Obviously, insurance companies, whose requirement is to look after the interests of their clients, might be tempted down that road. It would be helpful if my hon. Friend could reassure the House that she will keep the operation of the regulations under close scrutiny to ensure that people are not disadvantaged by sharp practice.
Something positive could result from the recoupment regulations in that insurance companies and those subject to compensation claims may recognise where their liability lies. For example, industrial injury claims may be made because of a company's inappropriate practices that could injure workers. The insurance company might say to that company, "We have had to stump up on a number of claims. Your claims record is costing us money. Put your house in order." That positive benefit might come out of the introduction of the regulations.
I praise the Government for ensuring that the Macfarlane Trust, whose funding has been increased recently to deal with haemophiliacs, will not be subject to the recoupment provisions. That shows an appreciation of the problems of that group who are much in need of support.
I also note that miners are singled out for——

Dame Elaine Kellett-Bowman: rose——

Mr. Jack: I am sorry, I am trying very hard to keep within the time limit.
I see that miners are also a favoured group under the pneumoconiosis regulations. Did my hon. Friend the Parliamentary Under-Secretary give thought in drafting the regulations to the needs of nuclear workers who might be affected by industrial injury? I have some in my constituency who would be interested in her comments, either when replying to the debate or by letter afterwards.
The regulations also indicate that the Department of Social Security must advise people of their liabilities to recoupment within four weeks of request for that information. Will my hon. Friend assure me that her


systems are capable of delivering that information as rapidly as it is required? Recoupment, therefore, has much to commend it.
On the subject of cold weather payments, however, while I support the order—any improvement is better than none—when I checked with my local social security office I found that the last time this particular benefit was paid—I note from comments by my hon. Friend the Member for Norwich, North (Mr. Thompson) that it was not available to people under the last Labour Government—the office had received about 3,000 applications, only 500 of which were granted. If my hon. Friend the Under-Secretary cannot at this juncture move as far as some kind of additional flat-rate payment during the cold winter months, could she look at ways, perhaps through the use of the order book, of helping people to understand who is entitled to this particular payment? I am sure that, being a cost-conscious Minister, she will understand that to process 3,000 requests and pay out on only 500 of them costs a lot of money.
The problem of the aged and heat is one that voluntary organisations and local newspapers have tried to address. I put on record my praise of my local branch of Age Concern and the Blackpool Evening Gazette for what they have done this winter in trying to show elderly people how they can keep warm. Having visited many elderly people in my constituency, I was struck by one particular constituent who lives in a house with rather old-fashioned electric central heating. She was worried about being able to pay the bills and whether she should turn the heating on.
I am aware of the efforts made by the gas and electricity boards to assist elderly people. If my hon. Friend cannot change the regulations, could she discuss with the power suppliers the possibility of providing advice, such as energy audits of elderly people's houses, so that they can make the best use of their money? After this order is in place, perhaps my hon. Friend could reconsider the whole question of reassuring elderly people, perhaps through financial means, that keeping warm must be their first priority.
My right hon. Friend the Secretary of State, who I am pleased to see in his place on the Front Bench, knows of the efforts in my constituency—he attended an excellent meeting two years ago—and knows of the worries expressed by elderly people on this score. The time must now be right to look at the whole question of heating for the elderly and how it can be made affordable.

Dr. Norman A. Godman: I begin by asking the Secretary of State a question about cold weather payments. Will he ensure that they are paid promptly and that delays in payment are reduced to an absolute minimum? I want also to make a plea on behalf of my constituency that a more appropriate weather station be chosen for it. Many of my constituents in Greenock and Port Glasgow who live in poor housing are several hundred feet above sea level and hence several hundred feet above that particular weather station.
I want to speak principally about statutory instrument No. 73, regulation 13. I shall preface my remarks with a comment about one of the aims of the regulations, which must surely be an improvement of the quality of service given to claimants. The Minister seems not to show dissent when I say that. That is how it should be, especially in the

light of the report of the Public Accounts Committee, which was concerned with the quality of service to the public at local social security offices. When that report was debated in the House on 30 November last year, I directed most of my remarks to the sufferers of vibration white finger. I said that the tough criticisms of the poor quality of service to claimants did not hold for the two offices in my constituency.
With hindsight, that was a little rash of me, because on 15 December I received a report from the parliamentary ombudsman concerning an investigation that I had asked him to conduct into the disgraceful treatment meted out by DSS officials in Greenock and Port Glasgow to a young pregnant woman. Because of her resilience and determination and the assistance that she was given by an able social worker, she persisted with her applications for financial help. Her mother had put her out when she had announced that she was pregnant. At the time, I said that it was like a Victorian melodrama. The parliamentary ombudsman was scathing in his criticism of the treatment meted out to that young girl.
As you know, Mr. Speaker, I am fair-minded, so I must point out that the Under-Secretary—who is not in her place at the moment, although she has been here all evening—sent me a lengthy letter offering the Department's apologies to that young woman. She assured me that no other young woman in those circumstances would be treated as that girl was. I am willing to accept the assurances of the Under-Secretary and of the Minister concerning such treatment.

Rev. Martin Smyth: The hon. Gentleman will have to keep a close eye on them.

Dr. Godman: I shall keep a close watch—as I always do—on the behaviour of DSS officials in my constituency, given that several thousand people are directly dependent on social welfare incomes. I am sometimes tempted to think that the Minister should clear out, in wholesale fashion, the senior management of the DSS in the Scottish headquarters in Lady Lawson street in Edinburgh, but that is another matter.

Mrs. Wise: On the question of young pregnant girls, it is not simply the attitude of officials that is at fault, it is the regulations. My hon. Friend may not be aware that 16 and 17-year-old girls who become pregnant are not entitled to income support—even if they are put out of their homes, such as in the case that my hon. Friend described—until they are six months pregnant. Does my hon. Friend agree that that is disgraceful?

Dr. Godman: Of course I agree with my hon. Friend. As I have said, it is not only the disgraceful treatment meted out by officials, but the gaps in the regulations which, at that time, were new regulations. The problem was caused by a combination of the regulations and the treatment meted out by officials.
Let us now return to vibration white finger. Since I met the Minister, together with my hon. Friend the Member for Sunderland, North (Mr. Clay) and two or three others—and we were treated courteously—about 2,200 men in Greenock and Port Glasgow have made applications for that backdated disablement benefit and for the reduced earnings allowance. I regret to say that when I sought from the Minister's office details of the numbers who had


applied for the benefit throughout the United Kingdom, I was told that they were not available. However, I received them readily enough from my local DSS office.
For example, I wanted to know how many shipyard workers in Belfast had applied for that benefit, to which they are entitled. If the Minister is not willing to extend or to pull back the statutory instrument, I must ask him to answer my earlier question about letters of application that are to be posted on Monday of next week. When the doors of the DSS offices are closed on Monday evening, the 2,200 claims from Greenock and Port Glasgow will not be allowed. Many men who are entitled to this benefit live in remote areas of Scotland, in the Highlands and Islands, and many of them are miles from social security offices. They should be given some sympathy.

Mr. Frank Field: I should like to add my weight to what my hon. Friend said, because there are about 2,000 applications in the Birkenhead offices for this benefit. I was alarmed to find that although the commissioner's decision was made in September, processing of claims in the Birkenhead offices did not start until 19 January. Does my hon. Friend agree that the processing of claims and the sending out of decisions is one way to spread by word of mouth the knowledge that people may be entitled to claim? Given that the officers have sat on the applications, it is crucial that the message goes out clearly from the debate that people have a few more days in which to make applications. As my hon. Friend says, applications posted on Monday should be accepted.

Dr. Godman: I am grateful for that fine intervention by my hon. Friend the Member for Birkenhead (Mr. Field). The concept of justifiable ignorance can still be applied to many people. A Mrs. McLoughlin telephoned me from Edinburgh today. She had heard about what we in Scotland call the take-up campaign and went to the Causewayside office of the DSS to make an application, but was turned away by the official at the counter.
It is lamentable that in Scotland the Department has failed to publicise the implications of the test case in Sunderland in August last year. In the case of Belfast, any publicity urging people to make such claims has come from the conveners of the shop stewards' committee of Harland and Wolff. In Sunderland, it has come from the unemployed workers' offices, and in my constituency I paid for a big advertisement in my local paper urging people to make such applications. The Fees Office will pick up the bill for that advertisement.
One of my major criticisms of the DSS is its deliberate failure to advertise the implications of test cases for claimants and would-be claimants. We have the vibration white finger take-up campaign in Scotland. I am talking about ex-forestry workers in our remote communities and construction workers living in the islands who will get to know about this benefit when, perhaps, it is too late for them to claim. There has been a failure to reach those people and meet their legitimate claims.
I look forward to the day when the English electorate puts out these Ministers. I say English electorate because Scottish Ministers are doomed. When a Labour Minister is in charge of the Department of Social Security, I should like to see him sort out the senior officials in that

Department, because they have badly let down many of my constituents and many other people throughout Scotland and the rest of the United Kingdom.

Mr. Archy Kirkwood: This is my second opportunity to make a brief contribution today. I am grateful to the hon. Member for Greenock and Port Glasgow (Dr. Godman) for referring, albeit in passing, in his short and useful contribution to the fact that the changes in regulation 13 affect not just shipyard and industrial workers in heavier industries—the people that will be mainly affected—but such people as forestry workers. The Government must bear that in mind when they are considering the implications of this change.
As I represent a constituency that does not have a heavy industry base providing part of its employment prospects, perhaps it is useful that I should support the able case that was made by the hon. Members for Sunderland, North (Mr. Clay) and for Liverpool, Garston (Mr. Loyden) on the question of the proposed change in regulation 13. It is a very shabby change. Ministers should have had the courage of their convictions. They should have told their officials quite clearly that they, the officials, cannot always seek to redress unacceptable decisions—unacceptable as the officials see them—taken by tribunals in the adjudication process, that they cannot simply use secondary legislation changes like the change to regulation 13 simply to redress the balance.
The important effects of vibration white finger are felt throughout the length and breadth of the land. However, the cost of retaining the provisions of regulation 13 must be finite, and it is quite wrong to move the goal posts in this way.
I want to refer now to the Income Support (Transitional) Amendment No. 2 Regulations 1989. Ministers' decision to make this change has my unequivocal support. They must have been under an inordinate amount of pressure from their officials to have no truck with any changes, to avoid tinkering with transitional support. I understand that it is a difficult benefit—for a reason to which, if I get a chance, I shall refer later. I recognise that this step must have taken courage, and I welcome it wholeheartedly.
Having said that, I have to point to the fact that about 200,000 people on transitional support will still feel the effect this April. If there have been problems in advertising the proposed changes in regulation 13, there will certainly be worries this April because of the changes in transitional support, and people will be unaware of these, too. The Department is not doing nearly enough to make clear to people, by advertising, the difficulties that they will have when the uprating advantages come through.
Some people who are falling out and are being floated off transitional protection will find that they are getting no actual cash increases. It is my experience, and my submission, that a vast proportion of those 200,000 people will, in ignorance, look forward to operating in the normal way. They will get a shock. They will find themselves in severely straitened financial circumstances in the 12 months following April 1990.
The Government must recognise that, for example, there have been significant changes in the financial circumstances of some poorer families and pensioners, particularly as a result of the poll tax changes. The poll tax


provisions that are about to be visited on people south of the Border have been in operation north of the border for nearly a year. There will he a great need and a great demand for the full protection that the uprating orders afford, but, because of the erosion of transitional protection that has been built in since 1988, that will simply not be available to people who are currently expecting it. The Government must pay some attention to this matter.
The changes relating to severe weather payments, in so far as they go, are welcome. I want to repeat and to reinforce a point that was made earlier: that the flat-rate £5 payment, which was set originally in, I think, 1986, must be a candidate for uprating in some way, either on an occasional, ad hoc basis—every few years—or as part of the price protection available with other benefits. Ministers should look carefully at the level of flat rate benefit for the severe weather payment and find ways to increase it in the immediate future.
Secondly, many DSS offices fall within the ambit of weather stations that are near the coast. The hon. Member for Greenock and Port Glasgow cited an example of this. The weather stations near the coast regularly reflect warmer temperatures.
The best case to illustrate my point is that experienced by my hon. Friend the Member for Ross, Cromarty and Skye (Mr. Kennedy) who, in 1987, found the temperature at Aviemore was minus 16 deg C but his constituents did not receive any severe weather payments because the weather station was linked to Kinloss, which never experienced temperatures below zero. Only Eskdalemuir, which is in my constituency, regularly triggers payments, and that is the most inland weather station in Scotland.
The ambient ground temperature can often be significantly reduced by the wind chill factor, and my hon. Friend the Member for Orkney and Shetland (Mr. Wallace) has made strong representations to the Department about that. There are easy and simple methods to establish temperature that include the wind chill factor, so that the Government cannot argue that it is too complicated to do so. The need for the severe weather payment, although luckily not felt this year, is as great as it was, and unless the Government find ways to improve the system, the benefit will be eroded and, like child benefit, will wither on the vine.

Mr. Paul Flynn: The hon. Member for Nuneaton (Mr. Stevens) accused the Labour party of not giving credit where credit is due. I hope that we shall have the pleasure of thanking the Minister and giving him full credit for it when he withdraws the regulation altering the law on vibration white finger. My hon. Friends the Members for Sunderland, North (Mr. Clay), for Liverpool, Garston (Mr. Loyden), for Walsall, North (Mr. Winnick) and for Greenock and Port Glasgow (Dr. Godman) have ably destroyed any case for this change. One of the reasons we feel so passionately about this is our personal experience of heavy industry and our knowledge of how one of the bonuses of working is underpaid degrading jobs is often a crippling disease. It was clear from the speeches of Tory Members and the difficulty that one of them had in pronouncing "pneumoconiosis" how unfamiliar they are with this experience.
This regulation is cruel and unjust and should be withdrawn. I hope that, even at this late stage, the Government will do that. I cannot think of any answer that they could possibly give to justify the regulation. However, my hon. Friends are grateful for the intervention by the Minister of State, which was wholly justified, to allow so many others to come forward. If only 1,000 or 2,000 are left who have not met that claim, their rights should be protected.
The hon. Member for Fylde (Mr. Jack) criticised us for not making practical suggestions. However, we have some practical suggestions for the severe weather payments scheme, which is miserly, paltry and unworkable. If it ever has to be operated again, if the greenhouse effect is abated, the scheme will collapse under the weight of its own absurdities, as it did in 1986–87. As hon. Members have said, the payment is only £5 when we know that, on average, pensioners spend over the year £9 a week on heating, and over the winter that is substantially increased. Therefore, £5 is fairly meaningless. The hon. Member for Fylde valuably drew attention to how badly the scheme operated when it was tested. He gave an example of 3,000 people applying and only 500 being successful.
That is precisely what happened. Large numbers applied and, although 1·4 million were entitled to claim under the scheme, 500,000 were not successful, let alone the many people—the one to six who applied—who were not entitled to participate in it. The cost of advertising the scheme in the winter of 1987 represented the price of making 82,000 severe weather payments at that rate.
We suggest that the Government pay out under a scheme that is automatic. It could be done, because the system as it exists provides full details of all those entitled to severe weather payments. The only additional information needed, the Minister informed me some time ago, is how many claimants would be eliminated because they have capital—what was then £500 but is now £1,000. The simple answer is to increase the capital limit—the funeral money—from £1,000 to the usual £3,000. In other words, the information is already in the hands of the Department.
That would end the farce of local temperature triggers. The pay-out could be made on a national basis the moment bitter weather arrived and we would achieve a worthwhile gain for only a modest increase in the number of people receiving benefit. The administrative cost would be slashed to nothing, and the take-up would rise to 100 per cent. Such a system would be simple and cheap and would reach those in greatest peril.
We are well aware of the seriousness of the situation in view of the excessive number of winter deaths. We should send out a signal from the House that does not say, as it was once suggested from the Government Benches, that the elderly should dress up like Mother Hubbard or, as a predecessor of the Under-Secretary suggested, that they should go to jumble sales and deck themselves out for the winter.

The Parliamentary Under-Secretary of State for Social Security (Mrs. Gillian Shephard): When the hon. Gentleman says that the scheme should operate nationally, does he mean that, although it is freezing in Aberdeen and boiling in Brighton, the scheme should nevertheless apply all over the country?

Mr. Flynn: I am shocked and outraged at the hon. Lady's suggestion that Aberdeen is in the same country as Brighton. I am sure that there would be similar objection if she suggested that Cardiff was in the same country. For this purpose, I am suggesting that the nations within this kingdom are the nations of Ireland, Scotland, England and Wales.
At present, the real value of the scheme is being drowned in administrative costs. It is a ludicrously wasteful arrangement. If it were changed, the nations could be divided into north and south—as many people think they should be divided in England—and in Wales and Scotland the system could work. I think I see Conservative Members shaking their heads in dissent, but that is what happened last time. The scheme was thought to be so ludicrous that hon. Members on both sides were up in arms, saying that it was crazy to wait for triggers that were miles from where the people lived. Finally, the Government decided under pressure to declare a national trigger. Why should they not do that again?
The important message that should go out from the House to the elderly who are at severe risk—and thousands of deaths are involved in this issue—is: "When the cold weather strikes, put up your heating. Keep warm and the costs will be met." That is not the message that is reaching them now. The message coming from the Government is, "We do not care. We are not bothered with what you do." All hon. Members are aware of cases where there is central heating in homes but the elderly do not use it; it is rarely, if ever, switched on. That is a terrible waste.
When discussing the recoupment regulations, the Minister gave an interesting account—it was something fresh for those of us who were on the Standing Committee which considered the enabling legislation—when he said that there would be a saving to the Government of £55 million. Perhaps he should have called it a cut. Either way, where will it come from? We were assured, if I understood the Minister aright, that it would not be a cut in benefits, that it would not be benefit confiscation.
In fact, that is precisely what it is, for while those on benefit will receive their benefits—there is a long list of essential benefits—they will not receive the compensation due to them. It is another Government cut. The Government have suddenly discovered an opportunity to save money and they are doing it in the teeth of universal opposition.
The Minister of State announced in a press release that he had listened to the Association of British Insurers. I accept that he had listened to them, but he had not done what they asked him to do, which was to set the limit at £5,000. I say with some certainty that, in the years ahead, Conservative Members will encounter in their surgeries cases that are so complex and unjust that they will ask themselves, "How on earth did we ever pass that legislation?"
The Government's action is laudable in many ways, and that there is courage behind it is something for which we give them credit. However, there is also in it some recklessness. The Government are trying to achieve an impossible objective in trying to mix compensation paid for injury, suffering or pain with social security funds paid out for very different reasons to maintain a standard of living under certain circumstances. Parts of the scheme are crude legislative lunacy, as will become apparent when cases involving contributory negligence come to the fore.
The Government are taking from claimants not the value of the benefits themselves but the value of compensation that will now never be received. That is the simple truth of the matter. Under the Government's scheme, sometimes the guilty will be rewarded and the innocent will suffer. Many right hon. and hon. Members will find cases coming before them that will be difficult to believe. The great flaw in the scheme is the Government's attempt to mix oil with water, in trying to exchange benefits for compensation.
A number of hon. Members have referred to the Lawson embarrassment bonus, and at least one hon. Member read from a brief that related to the previous debate. If we are to reach some kind of agreement and save unnecessary disputes between both sides of the House, it may be as well if the briefings given to Conservative Members are circulated among right hon. and hon. Members in all parts of the House. The much-lauded Lawson embarrassment bonus seems to be giving great comfort to Government Members. The story needs repeating.
The sum involved is only £90 million for the first year and £200 million for the second. Right hon. and hon. Members will remember the remarkable series of events. There was the Autumn Statement and an uprating statement, yet there was no mention of the Lawson embarrassment bonus in either of them. Suddenly a remarkable event occurred. The then Chancellor of the Exchequer held a press conference in the company of 12 untruthful, lying journalists and one silent tape recorder, as a consequence of which it was inaccurately reported that the Chancellor intended to means-test pensions.
A matter of weeks passed, and the then lamented Secretary of State for Social Security pulled out of the hat a marvellous new measure—but one involving only a tiny amount of money.

Mr. Andrew Mitchell: Do not the Opposition welcome that improvement?

Mr. Flynn: I say to the hon. Member for Gelding that of course we welcome it, but it is means-tested and will be received by less than half of the pensioners on income support.

Mr. Mitchell: On a point of order, Mr. Speaker. As in so many other respects, the hon. Member for Newport, West (Mr. Flynn) is wrong about the name of my constituency, which is Gedling, not Gelding.

Mr. Flynn: I am sure that there was a Freudian reason for my mistake, but I would not be so indelicate as to explore it.
We entirely share the Government's view that a group of elderly pensioners need special help. However, the new benefit will be means tested and will assist only those aged over 75 who are already receiving income support, or those aged over 60 who are receiving disablement benefits. Half the pensioners on income support will not enjoy that new benefit. The amount payable is only £2·50 to a single person and £3·50 to a married couple, which compensates in only tiny measure for the great cuts that pensioners have suffered because of the breaching of the link between prices and earnings.
In reality, life today is very different from the fantasy world portrayed by Conservative Members. This very day, a report has revealed that 250,000 households in Britain


are in serious financial trouble because of debt. The report, published by the Church of England Children's Society, is part of a great confetti of reports. They come out weekly and they all make the same points. They are issued by bodies which are not Left-wing but are genuinely independent and involved in the care of children and the elderly. The message is repeated on every page of this report. It says that social security cuts have savagely divided Britain.
I see that the Secretary of State has the report with him, and I am sure that he will be able to see a condemnation on every page. It says that the YTS rates are too low; that loans are not working; that making a claim is so difficult that only the desperate succeed; that the system absurdly discourages young people from going to work; that the social fund is inadequate; that the system is hostile to pregnant young women—the list goes on and on.
Each year that the Government have been in office they have produced one major piece of legislation that has cut an important benefit. We have become a divided and unhappy nation. The rich have had tax cuts lavished on them, and the poor have been cruelly robbed. In a mockery of their poverty the ex-Chancellor—the great architect of divided Britain—today flaunts his new wealth. Moonlighting from his parliamentary job, he now brings in a gross salary greater than the earnings of 100 pensioners.
Finally, I quote early-day motion 105, which I commend to Conservative Members:
That this House notes that at times of growing international tension the Government's policy is to increase spending on weapons, in times of stability the Government's policy is to increase spending on weapons and in times of lessening tension the Government policy is to increase spending on weapons; and calls on the Government to answer a changing world situation with a flexible response.
There must be a flexible response, and we look for a peace dividend as a result of that. Hon. Members on both sides of the House who wish to use that peace dividend constructively for social service will unite to say that a rich slice of it must be spent on social security.

The Parliamentary Under-Secretary of State for Social Security (Mrs. Gillian Shephard): This has been a wide-ranging and interesting debate—as it is usual to say. The measures have been described variously as squalid and sensible, as cuts and beneficial. There seems to be general agreement on their complexity, and my hon. Friend the Member for Norwich, North (Mr. Thompson), who reminded the Government of the need to produce simpler regulations, should remember that the Department has received the plain English award for the simplicity of its forms.
There have been balanced contributions from a number of hon. Members, such as my hon. Friends the Members for Ealing, Acton (Sir G. Young), for Gedling (Mr. Mitchell), for Nuneaton (Mr. Stevens) and for Fylde (Mr. Jack). There have been passionate contributions from Opposition Members on the understandably difficult issue of industrial injury.
I shall attempt to deal with as many of the issues as possible, which is more than I can say for some of the contributions that have been made.
The draft Social Security (Industrial Injuries) (Regular Employment) Regulations 1990 are, as my right hon.

Friend the Secretary of State said, wholly beneficial. I am glad that those regulations at least commend themselves to all Members of the House.
I listened with interest to the points raised by the right hon. and hon. Members of the Opposition in connection with the proposal to repeal regulation 13 of the Social Security (Industrial Injuries and Diseases) Miscellaneous Provisions Regulations 1986, and in particular, of course, to their concern about that condition known as vibration white finger. There were strong contributions from, among others, the hon. Members for Greenock and Port Glasgow (Dr. Godman), for Sunderland, North (Mr. Clay), for Liverpool, Garston (Mr. Loyden), for Roxburgh and Berwickshire (Mr. Kirkwood) and for Preston (Mrs. Wise).
I remind the House that the original decision to revoke the regulation was made as long ago as December 1988. Almost a year and a quarter will have passed before the regulation ceases to have effect. As my right hon. Friend the Secretary of State said earlier, the transitional regulation has been in operation for nearly three and a half years and there is no justifiable reason now why it should continue. Those for whom this regulation was originally intended have been provided with an opportunity to claim and those who also might benefit from the wider interpretation put upon the regulation by the tribunal of Commissioners in August 1989 have also had ample time to make a claim for benefit.
We have, following representations from Opposition Members, allowed regulation 13 to continue for a further three months. Claims received after the regulation ceases to have effect—this should be remembered—will still be accepted and considered under the current rules. Transitional regulations, especially those of a quite exceptional nature, cannot be allowed to continue indefinitely. The regulation was never intended to cover justifiable ignorance, but circumstances in which a person was mentally or physically incapable of putting in a claim on time. It is a transitional regulation which has been in place more than three years. The time is now right to amend it.
A question was asked about the number of claims that have been received under regulation 13. The answer is 26,000.

Mr. Clay: I hear what the hon. Lady says, but will she give one small undertaking as a gesture of sincerity from the Government? Will she undertake that offices will be asked to locate those claims that were made between vibration white finger becoming a prescribed industrial disease and the Kenneth Potts case? Where, until the commissioner's decision, DSS officers told people that they did not have good cause to claim, will the DSS write, inviting them to resubmit a claim without a time limit?

Mrs. Shephard: I shall look at the hon. Gentleman's suggestion, but I cannot give any undertaking now.
Although claims received at local offices on Monday 12 February will have to be dealt with under the new amendments, I shall ensure that any claims lodged at local offices before that date, including the weekend, will be endorsed accordingly. The adjudication officer will then be able to deal with the claims under the current provisions.
The social fund cold weather payments scheme is one of a range of measures that the Government have taken to help those most at risk during periods of cold weather. It


has a number of merits. It is simple to understand. It provides £5 for particularly vulnerable groups for any seven-day period of cold weather—when the average temperature is 0 deg C or below. The use of that clear, fixed trigger point avoids confusion about eligibility, which is more than can be said for the half-baked suggestions emanating from the Opposition Front Bench.
Our scheme is sensitive to differences in local conditions and although windchill is always a matter for debate we reviewed the effectiveness of the weather stations this autumn and are satisfied that each one is reasonably representative of the main centres of population in the local office's area. The scheme also targets help on those particularly at risk. Payment can be made to the elderly, sick, disabled and very young.
In the past year to October 1989, gas prices fell in real terms by 16 per cent. It now costs less than in 1970. The price of domestic electricity fell by 8 per cent. in the same five years.
The regulations widen access to the scheme further by raising the savings limit for elderly people from £500 to £1,000. As announced by my right hon. Friend, that increased limit for elderly people will be used for the rest of the social fund from April. In order to make it possible for more elderly people to receive cold weather payments this winter, the regulations bring forward the effective date of the change for the cold weather scheme to 1 January. That should be welcomed by the House.

Mr. Winnick: Does the hon. Lady realise how miserly those arrangements are? Unless it is freezing, not a penny will be paid and then, as she said, it has to freeze for seven consecutive days. Does she not have constituents like mine, who have the smallest possible income and simply cannot afford to pay their fuel bills even when it is not freezing?

Mrs. Shephard: The hon. Gentleman knows that allowance is already made in income support for heating costs. The £5 payment is intended to provide additional help in very cold weather.
As for the Income Support (Transitional) Amendment No. 2 Regulations that relate to children returning home from local authority care, we have attempted to help the particularly vulnerable groups. The amendment regulations further reflect our concern about exceptional cases. The regulations will help the tiny minority of families who still have transitional protection and whose children are in local authority care.
We provide such families with additional benefit when their children come home temporarily from care. We wish to encourage children to take advantage of home leave. We do not want the additional benefit of leave to reduce the financial protection for parents. We have therefore legislated accordingly. I remind the House that special arrangements were incorporated in the transitional protection for the severely disabled and also for those who require respite care in residential homes or nursing homes.
As for recoupment, the Opposition have misunderstood the position, despite the fact that the matter was fully debated last year in Committee. The division of damages into special damages and general damages is almost academic. The distinctions apply only to cases that are heard in court—1 per cent. of all cases. In all the other

cases—99 per cent.—compensation for total damages is already sought. The aim of the legislation and regulations is to accept the realities.
In general terms, the legislation is based on two fundamental principles: that the compensator should fully compensate a person for injuries caused to him and that his liability should not be subsidised by the social security services. Such a scheme operates in most EC countries. I do not know why the Opposition fail to understand that it is the compensator's liability that is dealt with in the legislation.
The second principle is that the injured person should not receive more from two sources than he might receive in compensation or social security alone. However, the savings to which Opposition Members referred come from the compensators. We have been grateful for the co-operation of a number of outside organisations in working out the details of the scheme in such a way as to reduce the burdens on them. We are well aware of the calls for a higher small payment limit, but we believe that £2,500 is a reasonable figure.
It has been an interesting debate, with good contributions from hon. Members on both sides of the House. On the whole, the regulations provide a package of measures that are designed to improve and refine the way that the social security system operates. They deserve to be supported. I recommend their approval.

Question put and agreed to.

Resolved,
That the draft Social Security (Industrial Injuries) (Regular Employment) Regulations 1990, which were laid before this House on 18th January, be approved.
That the draft Social Security (Recoupment) Regulations 1990, which were laid before this House on 25th January, be approved.—[Mr. Newton.]

Motion made, and Question put,
That an humble Address be presented to Her Majesty, praying that the Social Security (Industrial Injuries and Diseases) Miscellaneous Provisions (Amendment) Regulations 1990 (S.I., 1990, No. 73) dated 22nd January 1990, a copy of which was laid before this House on 23rd January, be annulled.—[Mr. Meacher.]

The House proceeded to a Division, and Mr. Speaker having directed that the doors be locked—

Mr. Speaker: Order. I understand that there has been a miscalculation and that I called for the doors to be locked one minute early. I shall have the doors opened for one minute.

Whereupon the doors were unlocked.

The House having divided: Ayes 218, Noes 270.

Division No. 69]
[10 pm


AYES


Abbott, Ms Diane
Bermingham, Gerald


Allen, Graham
Bidwell, Sydney


Alton, David
Blair, Tony


Anderson, Donald
Blunkett, David


Archer, Rt Hon Peter
Boateng, Paul


Armstrong, Hilary
Boyes, Roland


Ashdown, Rt Hon Paddy
Bradley, Keith


Ashton, Joe
Bray, Dr Jeremy


Banks, Tony (Newham NW)
Brown, Gordon (D'mline E)


Barnes, Harry (Derbyshire NE)
Brown, Nicholas (Newcastle E)


Barron, Kevin
Buchan, Norman


Battle, John
Buckley, George J.


Beckett, Margaret
Caborn, Richard


Beggs, Roy
Callaghan, Jim


Beith, A. J.
Campbell, Menzies (Fife NE)


Bell, Stuart
Campbell, Ron (Blyth Valley)


Benn, Rt Hon Tony
Campbell-Savours, D. N.


Bennett, A. F. (D'nt'n amp; R'dish)
Canavan, Dennis




NOES


Adley, Robert
Forsyth, Michael (Stirling)


Aitken, Jonathan
Forth, Eric


Alexander, Richard
Franks, Cecil


Alison, Rt Hon Michael
Freeman, Roger


Allason, Rupert
French, Douglas


Amess, David
Fry, Peter


Amos, Alan
Gale, Roger


Arbuthnot, James
Gardiner, George


Arnold, Jacques (Gravesham)
Garel-Jones, Tristan


Arnold, Tom (Hazel Grove)
Gill, Christopher


Ashby, David
Glyn, Dr Sir Alan


Atkins, Robert
Goodlad, Alastair


Atkinson, David
Goodson-Wickes, Dr Charles


Baker, Rt Hon K. (Mole Valley)
Gorman, Mrs Teresa


Baldry, Tony
Gorst, John


Batiste, Spencer
Gow, Ian


Beaumont-Dark, Anthony
Grant, Sir Anthony (CambsSW)


Bellingham, Henry
Greenway, Harry (Ealing N)


Bendall, Vivian
Greenway, John (Ryedale)


Benyon, W.
Gregory, Conal


Blackburn, Dr John G.
Griffiths, Peter (Portsmouth N)


Blaker, Rt Hon Sir Peter
Grist, Ian


Body, Sir Richard
Ground, Patrick


Boscawen, Hon Robert
Hague, William


Boswell, Tim
Hamilton, Hon Archie (Epsom)


Bottomley, Peter
Hamilton, Neil (Tatton)


Bottomley, Mrs Virginia
Hampson, Dr Keith


Bowden, A (Brighton K'pto'n)
Hanley, Jeremy


Bowden, Gerald (Dulwich)
Hannam, John


Bowis, John
Hargreaves, A. (B'ham H'll Gr')


Boyson, Rt Hon Dr Sir Rhodes
Hargreaves, Ken (Hyndburn)


Braine, Rt Hon Sir Bernard
Harris, David


Brandon-Bravo, Martin
Hawkins, Christopher


Brooke, Rt Hon Peter
Hayes, Jerry


Brown, Michael (Brigg amp; Cl't's)
Hayward, Robert


Buchanan-Smith, Rt Hon Alick
Heathcoat-Amory, David


Budgen, Nicholas
Heseltine, Rt Hon Michael


Burt, Alistair
Hicks, Mrs Maureen (Wolv' NE)


Butcher, John
Higgins, Rt Hon Terence L.


Carlisle, John, (Luton N)
Hill, James


Carlisle, Kenneth (Lincoln)
Hind, Kenneth


Chapman, Sydney
Hogg, Hon Douglas (Gr'th'm)


Clark, Sir W. (Croydon S)
Holt, Richard


Colvin, Michael
Howard, Rt Hon Michael


Cormack, Patrick
Howarth, Alan (Strat'd-on-A)


Couchman, James
Howe, Rt Hon Sir Geoffrey


Cran, James
Howell, Rt Hon David (G'dford)


Davies, Q. (Stamf'd amp; Spald'g)
Howell, Ralph (North Norfolk)


Devlin, Tim
Hughes, Robert G. (Harrow W)


Dorrell, Stephen
Hunt, David (Wirral W)


Douglas-Hamilton, Lord James
Hunt, Sir John (Ravensbourne)


Dunn, Bob
Irvine, Michael


Durant, Tony
Irving, Sir Charles


Emery, Sir Peter
Jack, Michael


Evans, David (Welwyn Hatf'd)
Janman, Tim


Evennett, David
Johnson Smith, Sir Geoffrey


Fairbairn, Sir Nicholas
Jones, Gwilym (Cardiff N)


Fallon, Michael
Jones, Robert B (Herts W)


Favell, Tony
Jopling, Rt Hon Michael


Fenner, Dame Peggy
Kellett-Bowman, Dame Elaine


Field, Barry (Isle of Wight)
Key, Robert


Finsberg, Sir Geoffrey
King, Roger (B'ham N'thfield)


Fishburn, John Dudley
King, Rt Hon Tom (Bridgwater)


Fookes, Dame Janet
Knapman, Roger


Forman, Nigel
Knight, Greg (Derby North)

Carlile, Alex (Mont'g)
Lamond, James


Clark, Dr David (S Shields)
Leadbitter, Ted


Clarke, Tom (Monklands W)
Leighton, Ron


Clay, Bob
Lestor, Joan (Eccles)


Clelland, David
Lewis, Terry


Cohen, Harry
Litherland, Robert


Coleman, Donald
Livingstone, Ken


Corbett, Robin
Livsey, Richard


Corbyn, Jeremy
Lloyd, Tony (Stretford)


Cousins, Jim
Lofthouse, Geoffrey


Cox, Tom
Loyden, Eddie


Crowther, Stan
McAllion, John


Cryer, Bob
McAvoy, Thomas


Cummings, John
McCartney, Ian


Cunliffe, Lawrence
McFall, John


Dalyell, Tarn
McKay, Allen (Barnsley West)


Darling, Alistair
McKelvey, William


Davies, Ron (Caerphilly)
McLeish, Henry


Davis, Terry (B'ham Hodge H'l)
McWilliam, John


Dewar, Donald
Madden, Max


Dixon, Don
Maginnis, Ken


Dobson, Frank
Mahon, Mrs Alice


Doran, Frank
Marshall, Jim (Leicester S)


Douglas, Dick
Martin, Michael J. (Springburn)


Duffy, A. E. P.
Martlew, Eric


Dunnachie, Jimmy
Maxton, John


Dunwoody, Hon Mrs Gwyneth
Meacher, Michael


Ewing, Harry (Falkirk E)
Meale, Alan


Fatchett, Derek
Michael, Alun


Faulds, Andrew
Michie, Bill (Sheffield Heeley)


Fearn, Ronald
Michie, Mrs Ray (Arg'l amp; Bute)


Field, Frank (Birkenhead)
Mitchell, Austin (G't Grimsby)


Fields, Terry (L'pool B G'n)
Molyneaux, Rt Hon James


Fisher, Mark
Moonie, Dr Lewis


Flannery, Martin
Morgan, Rhodri


Flynn, Paul
Morley, Elliot


Forsythe, Clifford (Antrim S)
Morris, Rt Hon A. (W'shawe)


Foster, Derek
Morris, Rt Hon J. (Aberavon)


Fraser, John
Mowlam, Marjorie


Fyfe, Maria
Mullin, Chris


Galloway, George
Murphy, Paul


Garrett, John (Norwich South)
Nellist, Dave


Garrett, Ted (Wallsend)
Oakes, Rt Hon Gordon


George, Bruce
O'Brien, William


Gilbert, Rt Hon Dr John
O'Neill, Martin


Godman, Dr Norman A.
Orme, Rt Hon Stanley


Gordon, Mildred
Parry, Robert


Gould, Bryan
Patchett, Terry


Graham, Thomas
Pendry, Tom


Griffiths, Nigel (Edinburgh S)
Pike, Peter L.


Griffiths, Win (Bridgend)
Powell, Ray (Ogmore)


Grocott, Bruce
Primarolo, Dawn


Hardy, Peter
Quin, Ms Joyce


Hattersley, Rt Hon Roy
Randall, Stuart


Haynes, Frank
Redmond, Martin


Heffer, Eric S.
Rees, Rt Hon Merlyn


Henderson, Doug
Richardson, Jo


Hinchliffe, David
Robinson, Geoffrey


Hoey, Ms Kate (Vauxhall)
Rooker, Jeff


Hogg, N. (C'nauld amp; Kilsyth)
Ross, Ernie (Dundee W)


Home Robertson, John
Ross, William (Londonderry E)


Hood, Jimmy
Rowlands, Ted


Howarth, George (Knowsley N)
Ruddock, Joan


Howell, Rt Hon D. (S'heath)
Sedgemore, Brian


Howells, Geraint
Sheerman, Barry


Howells, Dr. Kim (Pontypridd)
Sheldon, Rt Hon Robert


Hoyle, Doug
Shore, Rt Hon Peter


Hughes, John (Coventry NE)
Short, Clare


Hughes, Robert (Aberdeen N)
Sillars, Jim


Hughes, Roy (Newport E)
Skinner, Dennis


Hughes, Simon (Southwark)
Smith, Andrew (Oxford E)


Illsley, Eric
Smith, Rt Hon J. (Monk'ds E)


Ingram, Adam
Smyth, Rev Martin (Belfast S)


Janner, Greville
Snape, Peter


Jones, leuan (Ynys Môn)
Soley, Clive


Jones, Martyn (Clwyd S W)
Spearing, Nigel


Kaufman, Rt Hon Gerald
Steel, Rt Hon Sir David


Kilfedder, James
Steinberg, Gerry


Kirkwood, Archy
Stott, Roger


Lambie, David
Strang, Gavin

Straw, Jack
Welsh, Michael (Doncaster N)


Taylor, Mrs Ann (Dewsbury)
Williams, Rt Hon Alan


Taylor, Matthew (Truro)
Williams, Alan W. (Carm'then)


Thomas, Dr Dafydd Elis
Wilson, Brian


Thompson, Jack (Wansbeck)
Winnick, David


Turner, Dennis
Wise, Mrs Audrey


Wall, Pat
Worthington, Tony


Wallace, James
Wray, Jimmy


Wai ley, Joan
Young, David (Bolton SE)


Wardell, Gareth (Gower)



Wareing, Robert N.
Tellers for the Ayes:


Watson, Mike (Glasgow, C)
Mrs. Llin Golding and


Welsh, Andrew (Angus E)
Mr. Ken Eastham.

Knight, Dame Jill (Edgbaston)
Roe, Mrs Marion


Knowles, Michael
Rossi, Sir Hugh


Knox, David
Rost, Peter


Lamont, Rt Hon Norman
Rowe, Andrew


Lang, Ian
Ryder, Richard


Latham, Michael
Sayeed, Jonathan


Lawrence, Ivan
Scott, Rt Hon Nicholas


Lawson, Rt Hon Nigel
Shaw, David (Dover)


Leigh, Edward (Gainsbor'gh)
Shaw, Sir Giles (Pudsey)


Lennox-Boyd, Hon Mark
Shaw, Sir Michael (Scarb'j


Lester, Jim (Broxtowe)
Shelton, Sir William


Lilley, Peter
Shephard, Mrs G. (Norfolk SW)


Lloyd, Sir Ian (Havant)
Shepherd, Richard (Aldridge)


Lloyd, Peter (Farehamj
Shersby, Michael


Lord, Michael
Sims, Roger


Luce, Rt Hon Richard
Skeet, Sir Trevor


Lyell, Rt Hon Sir Nicholas
Smith, Sir Dudley (Warwick)


Macfarlane, Sir Neil
Speller, Tony


MacKay, Andrew (E Berkshire)
Spicer, Sir Jim (Dorset W)


Maclean, David
Squire, Robin


McLoughlin, Patrick
Stanbrook, Ivor


McNair-Wilson, Sir Michael
Stanley, Rt Hon Sir John


McNair-Wilson, Sir Patrick
Steen, Anthony


Madel, David
Stern, Michael


Malins, Humfrey
Stevens, Lewis


Maples, John
Stewart, Allan (Eastwood)


Marland, Paul
Stewart, Andy (Sherwood)


Marshall, John (Hendon S)
Stewart, Rt Hon Ian (Herts N)


Marshall, Michael (Arundel)
Stokes, Sir John


Martin, David (Portsmouth S)
Stradling Thomas, Sir John


Maude, Hon Francis
Sumberg, David


Maxwell-Hyslop, Robin
Summerson, Hugo


Meyer, Sir Anthony
Taylor, Ian (Esher)


Miller, Sir Hal
Taylor, John M (Solihull)


Mitchell, Andrew (Gedling)
Taylor, Teddy (S'end E)


Mitchell, Sir David
Temple-Morris, Peter


Moate, Roger
Thompson, D. (Calder Valley)


Monro, Sir Hector
Thompson, Patrick (Norwich N)


Montgomery, Sir Fergus
Thorne, Neil


Morris, M (N'hampton S)
Thornton, Malcolm


Morrison, Sir Charles
Thurnham, Peter


Moss, Malcolm
Townend, John (Bridlington)


Moynihan, Hon Colin
Tracey, Richard


Mudd, David
Tredinnick, David


Neale, Gerrard
Trippier, David


Needham, Richard
Trotter, Neville


Nelson, Anthony
Twinn, Dr Ian


Newton, Rt Hon Tony
Vaughan, Sir Gerard


Nicholls, Patrick
Viggers, Peter


Nicholson, David (Taunton)
Wakeham, Rt Hon John


Norris, Steve
Walden, George


Onslow, Rt Hon Cranley
Walker, Bill (T'side North)


Oppenheim, Phillip
Waller, Gary


Page, Richard
Ward, John


Paice, James
Wardle, Charles (Bexhill)


Patnick, Irvine
Warren, Kenneth


Patten, Rt Hon Chris (Bath)
Watts, John


Patten, Rt Hon John
Wells, Bowen


Pattie, Rt Hon Sir Geoftrey
Wheeler, Sir John


Pawsey, James
Whitney, Ray


Peacock, Mrs Elizabeth
Widdecombe, Ann


Porter, David (Waveney)
Wiggin, Jerry


Portillo, Michael
Wilkinson, John


Powell, William (Corby)
Wilshire, David


Price, Sir David
Wolfson, Mark


Raison, Rt Hon Timothy
Woodcock, Dr. Mike


Redwood, John
Yeo, Tim


Renton, Rt Hon Tim
Young, Sir George (Acton)


Rhodes James, Robert



Ridley, Rt Hon Nicholas
Tellers for the Noes:


Ridsdale, Sir Julian
Mr. Nicholas Baker and


Roberts, Wyn (Conwy)
Mr. Tom Sackville.

Question accordingly negatived.

East Hertfordshire Health Authority

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Patnick.]

Mr. David Evans: I thank—[Interruption.]

Mr. Speaker: Order. Will the hon. Member wait a moment please? Will hon. Members who are not remaining for the Adjournment debate please leave quietly?

Mr. Evans: Thank you, Mr. Speaker, for granting me this Adjournment debate. I welcome the opportunity to raise in full the funding of East Hertfordshire health authority. My hon. Friend the Under-Secretary is only too well aware of the strong feelings on this subject held by myself and my hon. Friends whose constituencies have the misfortune to fall within the ambit of North West Thames regional health authority. We have run out of patience and we want to see some action that will put an end to the cycle of incompetence, mismanagement of public funds and generally deceitful behaviour of the regional health authority, which has dogged patient care in our area for so long. Promises made by the region no longer have any credibility, and that has undermined staff morale.
To appreciate the specific problems faced by East Hertfordshire health authority, it is necessary first to see them within the wider context of the general position of the six shire authorities in the North West Thames region. In particular, it is necessary to examine the methods and formulae used by the regional health authority to allocate funds to the 13 district health authorities in the region.
For many years, the shire authorities have argued—rightly—for a formula that would result in a more equitable distribution of funds and for one that would take into account the distance from target and over target. Instead, the regional health authority has persisted with its practice of distributing funds on a pro rata to cash limits basis. In other words, the message that it has been sending out to its Left-wing friends in the inner London health authorities is clear—"The more you spend, the more we'll give you"—and that is precisely what it has done. The result is a regional health authority in which the inner London authorities can go grossly over budget without fear and where many of the shire authorities are forced to make cuts to help pay for that extravagant spending.
Perhaps not surprisingly, therefore, an inspection of the underlying position in 1989–90 of the 14 regional health authorities in England on the basis of income to expenditure reveals that only three are in deficit and one, of course, is the North West Thames regional health authority with a deficit of approximately £13 million, which is the largest and more than twice the size of the other two deficits put together.
The shocking practice of punishing well-managed and prudent authorities for the irresponsible and spendthrift policies of their neighbours is a problem that the Government have addressed in relation to local authorities. It is time that regional health authorities had to succumb to greater financial discipline—otherwise the incompetence of authorities such as North West Thames will continue to prevail.
That financial incompetence has manifested itself most recently in the expenditure on the Westminster and


Chelsea hospital scheme. During the nine months between July 1988 and March 1989, the cost of the scheme rose from an estimated £78 million to a staggering £173 million. My hon. Friends who represent shire seats in the region agreed to support the scheme on the basis of the original estimate and on the understanding that it would not have a detrimental effect on capital projects in the shire authorities. It is difficult to see how it can do anything but, given the vast increase in spending that is involved.
More recently, we have learnt that the authority has had to go back on a promise that it made to fund a CT scanner, which would have cost £100,000 in revenue to support. That promise has been broken not once, but twice.
Luton and Dunstable hospital needs £12 million for capital needs, which is a mere 15 per cent. of the overspend at Riverside. I repeat to my hon. Friend the Minister that we are not asking for more money, we are pointing out the consistent misuse of public funds, which results in some people in the region having as much as 25 per cent. more spent on their health than is spent on others.
Putting it another way, why should a person living in Welwyn Hatfield have 75p spent on him when for someone living in Brent the amount increases to £1? Where is the fairness in that? Why do shire authorities receive only 31 per cent. of the region's funding when, on the basis of population, they should rightfully receive 43 per cent.? Perhaps the Minister can enlighten us on that and not give the standard answer that next year we shall get 33 per cent., and the year after 35 per cent. I am afraid that we do not believe him any more. Only if the chairman and his administrators are changed, and only if the funds are reallocated, will we believe the promises that have been made over the years.
Frustration, bordering on contempt, for North West Thames regional health authority is not confined to my hon. Friends whose constituencies are within the region. Last month South Bedfordshire community health council passed unanimously a motion of no confidence in the ability of the regional health authority to manage the financial and planning affairs of the National Health Service in North West Thames region. The motion was supported by the chairmen of the other five shire community health councils in the region. It is worth reminding the House that those are independent bodies that represent local opinion on Health Service matters.
The South Bedfordshire motion encapsulated neatly the problems encountered in North West Thames. It was passed in view of the health authority's failure to take the necessary financial and planning measures to achieve the substantial strategic redeployment of resources from London to shire districts; to prevent the development of chronic overspending in the major strategically losing districts during the 1980s; to exercise the necessary measures to monitor, control and re-evaluate the cost escalation of capital projects, particularly in central London, one of which has risen by 220 per cent. of its June 1988 cost; and to recognise and fund the desperate and immediate capital needs of the district. That is a damaging indictment, but one that is entirely justified.
The problems for East Hertfordshire, however, have their origin as far back as 1974. There is not time to dwell on the background to the whole sorry affair. Suffice it to say that East Hertfordshire has traditionally suffered from under-funding and has been consistently under pressure to make economies of scale. There is a feeling of desperation

because we want to give service to the people, but starvation of money eventually weakens one's resolve. Yet money could easily have been found.
Let us take, for example, the staffing ratios of East Hertfordshire compared with the Riverside authority, an authority with a similar population but located in central London. Why has that authority funds for 120 occupational therapists compared to East Hertfordshire's measly 19, 119 physiotherapists compared to 18, and 179 district nurses compared to 17? So it goes on, with health visitors, speech therapists, psychiatric nurses and chiropodists. If measures had been taken to reduce the overstaffing in Riverside, money could have been diverted to assist the under-funded shire health authorities that are struggling to produce a basic service.
The real scandal involves nurses' regrading. The Prime Minister herself stood at the Dispatch Box and told the House that the Government would refund in full the cost of clinical regrading. However, the process of regrading has left us in East Hertfordshire with a shortfall estimated to be £400,000, excluding the cost of appeals. Despite earlier statements to the contrary, the regional health authority claims that it is not now in a position to fund the shortfall. Yet it is responsible. The money was there. It was its formula for distributing the money which led to a shortfall in East Bedfordshire and also in South West Hertfordshire.
The chairman of East Hertfordshire health authority is convinced, as I am, that had the exercise been conducted on the basis of actual cost there would have been enough resources to go round. The irony is that East Hertfordshire undertook the task more effectively than virtually anyone else, completing the exercise back in May last year, several months ahead of other authorities, some of which are still hearing appeals today.
The success and efficiency of the regrading process in East Hertfordshire has been recognised and acknowledged by the chairman of the regional health authority, yet it is his actions that have helped to bring about this shortfall, a shortfall that could have disastrous implications for an already overstretched authority such as East Hertfordshire. The effect of years of incompetence and mismanagement is being felt every day in East Hertfordshire.

Mr. Robert B. Jones: I am grateful to my hon. Friend and I apologise for interrupting his catalogue of the iniquities of North West Thames region, but it is true not only of East Hertfordshire but of the other shire districts. In North West Hertfordshire, such projects as the Marnham ward as part of the waiting list initiative are having to be cut back because the inefficiency of the region in distributing money to the districts. I hope that my hon. Friend will press this home to the Minister and make sure that action is taken soon.

Mr. Evans: I thank my hon. Friend for his intervention—it only underlines what I am saying about East Hertfordshire.
We have a loss of new out-patient appointments, fewer operations, a reduction in the number of respite beds, the suspension of some sessions and a freeze on many current vacancies throughout the district. How long will this go on? I repeat: it is not more money that is sought, but rather a more equitable distribution of available funds based on capitation. Why should £1 in Brent be worth only 75p in


Hatfield, Watford, Hemel Hempstead, St. Albans, Stevenage, Broxbourne, Hertford, South West Hertfordshire, or East Bedfordshire? The list is endless.
The Health Service in East Hertfordshire can no longer survive. What is needed is a solution. One was proposed by the National Health Service management board to North West Thames in July 1988, when the situation in East Hertfordshire was analysed. I hope that the Minister will be able to tell us whether these recommendations were pursued by the management board and whether they have been acted upon by North West Thames, because we see precious little evidence of it in East Hertfordshire.
The South Bedfordshire community health council concluded its motion of no confidence by calling upon the Secretary of State
to review the activities of the North West Thames regional health authority and to take the measures necessary to remedy the situation".
I hope that my hon. Friend the Under-Secretary will tell me that that is exactly what he intends to do. If not, why not? I call on him to instruct the Audit Commission to investigate this serious matter. Does he not realise that the National Health Service in the North West Thames health authority area will never have enough money while financial incompetence prevails?

Mr. Bowen Wells: I am deeply grateful to my hon. Friend the Member for Welwyn Hatfield (Mr. Evans) and to my hon. Friend the Under-Secretary of State for allowing me just two minutes to speak on this very important issue. The Minister will realise how angry are the hon. Member for Welwyn Hatfield and I and other hon. Members representing constituencies in the region and here tonight.
This has been going on not just for the past three years; we have been battling with the problem for the 10 years that I have been connected with it, and longer.
When Riverside was designed, it was said that, once it was built, money could be put into the districts. Instead, less money has come to them. East Hertfordshire has been closing beds, hospitals and family planning clinics for the past three or four months, while the North West Thames regional health authority indulges itself with another expensive scheme called Parkside. There, the number of nurses attending each patient will be four times, and the community nursing will be 10 times, that provided in East Hertfordshire—and that is just an estimate.
We are angry at the way that the Department of Health treats us. Ministers say, "Go back to the regional health authority and the district health authorities." When we complain to the regional health authority it says, "Go back to the Ministers." That leaves my hon. Friends and me in an impossible position in trying to get anything done.
Unless my hon. Friend the Minister can sort out the regional health authority in the way suggested by my hon. Friend the Member for Welwyn Hatfield, he must take out the whole of the shire county districts from the London regional health authorities. Let them be funded separately so that our areas can obtain a proper allocation to take care of patients in our hospitals, near their homes. That is the only solution unless my hon. Friend the Minister agrees to undertake a proper inquiry and to ensure that the chaos, inefficiency, stupidity and lack of care by the North

West Thames regional health authority—which, unfortunately, is supported by some of the most senior medical consultants in the London hospitals—is sorted out. I hope that he will make a robust reply.

The Parliamentary Under-Secretary of State for Health (Mr. Roger Freeman): My right hon. and learned Friend the Secretary of State and I are left in no doubt about the strong feelings of my hon. Friends the Members for Welwyn Hatfield (Mr. Evans), for Hertfordshire, West (Mr. Jones) and for Hertford and Stortford (Mr. Wells). They and their colleagues met my right hon and learned Friend and me on 16 and 17 January and expressed their strong feelings in forthright and trenchant terms. There is no doubt in Richmond house about the strength of feeling in the shire districts of North West Thames about the relative allocation of funds.
My right hon. and learned Friend and I have total confidence in the integrity and competence of the chairman and the regional general manager of the North West Thames regional health authority. They work extremely hard for the benefit of patients in the region. They, my right hon. and learned Friend and I recognise that there are very sharp differences of opinion on the issue, and in the 10 minutes available I shall try to deal with some of the points raised.
I welcome the acceptance by my hon. Friend the Member for Welwyn Hatfield that the present level of funding in the National Health Service is adequate. Indeed, he recognised the substantial advances made in recent years in funding the NHS, and I am grateful to him for his remarks. The case is not often put so trenchantly and clearly. Health Service funding for the hospital and community health services stands at £15 billion, and substantial and real rates of growth have been enjoyed in recent years.
My hon. Friend is quarrelling not about the total funding, but about the basis of allocation. The record shows that there has been a shift from the London districts to the shire districts of North West Thames during the past few years. I accept that it is not enough for my hon. Friend. However, it is important to put on the record the fact that between 1982–83 and 1988–89 the region enjoyed a cash increase in revenue resources of 48 per cent.; the outer London districts enjoyed a cash increase of 44 per cent.; the inner London districts had an increase of 42 per cent.; and East Hertfordshire health authority had an increase of 60 per cent. I do not have the figures for the other districts.

Mr. Wells: What about population?

Mr. Freeman: I shall deal with population in a moment. There has been a relative shift over that six-year period. We calculate that, at 1988–89 prices, about £20 million has been moved out of London to the shire districts. I take the point that, although there has been a shift, my hon. Friends are not satisfied with its extent.
I shall now deal with what my hon. Friend the Member for Welwyn Hatfield said in connection with my right hon. Friend the Prime Minister's statement on nurse regrading. We should be clear that the Prime Minister's statement related to full funding on what the estimated cost was said to be of the nurse regrading exercise. She made that statement before the exercise was launched. Her statement


stands. No Prime Minister or Minister could give a blank cheque offering to pay the full cost of the nurse regrading exercise. That exercise is under way. She gave the undertaking that the full estimated cost based upon the estimates for the districts and regions would be paid.
There are two points in our White Paper about weighted capitation which I hope that my hon. Friend the Member for Welwyn Hatfield will welcome. We have started for the regions the process of allocating funds in a more equitable way, which is weighted capitation. We have started for 1990–91 and in the two subsequent years we shall fund all the regions on the basis of capitation. that means that the number of residents in each region will be weighted for demography and morbidity. In the Thames regions there is an addition to that to take account of the relatively higher cost of providing services.
I now come to the vital point raised by my hon. Friend the Member for Welwyn Hatfield. We are saying to all 14 regions in England and Wales that they must make a positive start in 1991–92, the first year of our reforms, to allocate resources within each region on the basis of weighted capitation. That will take some years. I understand that the North West Thames region has started that process, albeit in a modest way. No doubt that is the result of pressure by my hon. Friends. I understand that, for 1990–91, some £3·5 million out of a total increase of resources to the region of £27 million is being allocated essentially on the basis of weighted capitation.
I could quite understand my hon. Friends saying that that is only £3·5 million and what about the rest of the funds allocated, as my hon. Friend the Member for Welwyn Hatfield rightly said, on the basis of inflation. North West Thames has begun the process and, like all the other regions, it will have to continue the process next year. I am told that the East Hertfordshire region will enjoy an increase of 9·91 per cent. next year, compared with the figure for the regions of 7 per cent.
My second point about the White Paper is perhaps more significant in terms of 1991–92, the financial year that begins in about 12 months. We have said that all districts, including East Hertfordshire, will be funded on the number of residents in each district, and not upon historic activity. I do not think that many hon. Members have yet appreciated the significant basis of funding that will occur in that year. For the first time, the health authority of my hon. Friend the Member for Welwyn Hatfield will have under its control sums related to the residents in the district.
I suspect that my hon. Friend's district is an exporter of services, possibly to the London teaching hospitals and to

surrounding hospitals. Through the process of negotiating and agreeing contracts between itself and other hospitals, the district health authority will be able to control the flow of resources to outside hospitals and districts. Candidly, we expect that, in the first year, the district health authority will broadly validate the existing flow of patients because we do not want a great disturbance in the pattern of patient care. However, it will, for the first time, be possible for the district health authority to control its own destiny and the flow of patients.

Mr. Robert B. Jones: My hon. Friend must not pretend that people go for treatment in London because that is what they choose. They go because the waiting lists are shorter there. They would much prefer to be treated in the hospitals in the shire district, and if we had our share of the money we could treat more patients there because it is cheaper to do so.

Mr. Freeman: My hon. Friend is right, and that is why we must all agree that our proposals for weighted capitation in the White Paper will benefit all shire districts. He must also accept that, with our concept of money following the patients, if we give the district health authority the funds, although the patients may be going to the London teaching hospitals, it will be able to decide whether those resources should be spent within the district. That will enable patients, perhaps for elective surgery, to get those services performed locally and as quickly. That is a major change in the basis of funding, and we believe that it will be welcomed by my hon. Friends.
My hon. Friend the Member for Welwyn Hatfield also mentioned the Riverside and Parkside district health authorities. I am disturbed by the figures of the increased costs of the new hospital that he quoted tonight. I shall look into that, and he is right to remind me of them. However, as a result of the Riverside reorganisation, we anticipate revenue savings of £15 million per annum by 1993–94. The Parkside proposals look like releasing some £7 million of revenue savings, and they will be available for reallocation.
I share the aim in whose direction my hon. Friends have pointed me. It is of a fairer, more equitable distribution of funds within the region. Our proposals in the White Paper, and our understanding of the strength of feeling of my hon. Friends, will ultimately lead to that goal.

Question put and agreed to.

Adjourned accordingly at nineteen minutes to Eleven o'clock.